Bill Zanker, chairman of the Great American Backrub Store, a New York City-based retail chain specializing in -- yes -- back rubs, had been considering a public offering since he founded his company, in 1992. "I knew I'd need a large amount of capital to cover the equipment, leases, and other costs we'd encounter if we expanded as rapidly as I wanted to," Zanker says. Early this year, when the Great American Backrub Store consisted of only two locations that tallied annual sales of just $600,000, Zanker took his company public. The initial public offering raised $6.25 million.

How did Zanker pull off such a financing coup? "From the beginning I focused my company's development on what I thought the investment community would want to see: a strong management team with proven experience at public companies, and a string of accurate, audited financial reports," he explains.

Zanker wooed Terrance Murray to accept the chief-executive post, in large part because Murray had already safely navigated Supercuts, a chain of hair salons, through its successful IPO. Both men realized they faced tough financing hurdles: "We didn't have impressive revenues or a lot of stores in place or a long track record," says Murray. "What we had was a great business concept and a very strong management team. We needed to supplement that with strong numbers."

To bolster its case, Great American paved a financial trail of daily productivity and sales reports from each store. Those reports supplemented quarterly financial statements that mimicked the format of public shareholders' reports.

"I had raised $1 million from private investors before we started operations," notes Zanker. "They didn't require us to audit our results, but I did that anyway because it was in our long-term interest to build a credible financial reputation. I never wanted to have to scramble around to double-check numbers or correct our financials."

Before investment bankers would take the company public, Great American was obliged to move from a regional to a Big Six accounting firm. But Zanker has no regrets. "As a small start-up, we couldn't attract the attention of a big accounting firm, so we hired a small firm that gave us top-quality service and kept our numbers completely accurate. The switch at the time of the IPO was simple because the quality of their work had been high."

But Zanker and Murray, recognizing that reliable numbers alone wouldn't be enough, hired a chief financial officer who had also worked at Supercuts. "He added a tremendous amount of credibility because he knew the process of raising capital and already had a lot of contacts on Wall Street," recalls Murray, who adds, "During an IPO, the Street tends to invest with the jockey -- that is, the management team -- rather than the horse."

Great American was a good bet. Zanker and Murray expect to open 15 stores this year, which ought to generate $5 million in sales. "Without the IPO none of that would be possible," Zanker says. Without all his preparation, the IPO wouldn't have happened either.