The Kingston-based group intends to open another 11 large stores at least in 1997 - including its first in Birmingham - in a challenge to the industry leaders Dixons and Kingfisher's Comet chain.
That would take the chain to 40 stores, creating 160 new jobs. Turnover is already set to pass the pounds 100m mark this year.
"Flotation is being discussed. With investment per store running at around pounds 500,000 a time, there are tremendous cash requirements for growth," said Michael Kraftman, Tempo's marketing director.
Tempo was founded in the early 1970s by Mr Kraftman's father, Gerald, the current chairman. It remains family controlled.
In 1992, venture capital group 3i invested pounds 3.25m for a 23.5 per cent stake to fund expansion into electrical superstores, offering computers alongside traditional TV, hi-fi and kitchen electricals, including washing machines and fridges.
Adopting a mixed format retail approach, as well as the main brands, Tempo also sells computers and fridges under its own in-house "Vanilla" label.
Now Tempo's sales per square foot are among the highest in the sector. Growth this year is set to propel it to fourth place in the sector, ahead of Tandy and behind Powerhouse, which was recently spun off by Hanson.
Tempo had a lively Yuletide, with like-for-like sales up 10 per cent over the holiday period.
"Christmas has been very good. There have been two peaks, with presents mainly before Christmas and, from Boxing Day, the bigger ticket items as people buy for themselves in the sales," said Mr Kraftman.
Dixons, the sector leader, is also expected to report robust Christmas sales with first-half results on Wednesday, led by strong demand for personal computers.
Tempo's 29 stores are based in London and the South-east, but the growth strategy is set to roll out the format into the Midlands and South-west, with further expansion into the North on the cards in future.
The chain made operating profits of pounds 2.9m on sales of pounds 85.7m in the year to the end of June 1996.