SMEs are a bit of an enigma and knowing how a company compares to competitors or how an influx of capital could help has driven more than a few business owners — and investors — crazy.
If only there was a “what-if machine” where you could input a company’s data and get back valuable financial information that could improve decision-making and the business itself. Well, now there is.
Self-Rating, an SAP Startup Focus program member, has developed a rating-as-a-service (RaaS) solution that makes it easier for small to medium-sized businesses to measure themselves against the competition and highlight their strengths and advantages to potential investors.
Self-Rating uses proprietary algorithms powered by SAP HANA, which helps users compare their business to peers and even pick up on warning signs and hidden problems to address, according to Dr. Jake Geller, co-founder and CEO.
“This is a product that’s only been available for Wall Street in the past. Now we’re taking it to Main Street,” Geller said. “There are hundreds of thousands of companies and Self-Rating can provide valuable data about the creditworthiness of small companies for whom today there’s no easy way of evaluating or understanding them.”
Companies of all sizes, as well as financial lenders, want a more complete picture of their financial performance. Self-Rating analyzes a business’ data against a global database to help business owners identify strengths, weaknesses, and value, added Ran Gazit, co-founder and chairman of Self-Rating. Users also can manipulate the data to factor in changes in the business to predict the impact financially, he said.
“For example, an SME can go to a lender and say I want to do this and if I do, this will be the result. It gives the business and the lender some guidance on what will happen,” Gazit said.
Such information is critical to both SMEs and lenders, he added: “Credit strangulation is impacting businesses around the world right now. People have difficulties with finances. In order to close the gap, we developed this engine to help them understand and improve their financial status.”
Building a Better Business
Self-Rating is targeting SMEs trying to evaluate themselves or secure investment funding.
“There’s not a lot of information about SMEs. A lot of finance organizations are lending money without enough knowledge about the companies they lend to,” Geller said.
Businesses can also use Self-Rating to evaluate their own customers and prospects, giving executives better visibility into their supply chain and customer relationships.
“It gives you a sense of strengths and weaknesses so you can build a better business plan based on who you do business with,” Geller said. “You can check yourself against another company and say I’m an ‘A’ compared to this other company’s ‘A-,’ so why am I paying twice the interest? It empowers small and medium-sized businesses to negotiate with their finance providers.”
Self-Rating expects to add more functionality, such as specific suggestions, training, and more detailed reporting, Geller said.
“With the assistance of SAP partner iProsis, we leverage SAP HANA in-memory database technology and predictive analytics interfacing to SAP ERP, along with outside data through our proprietary algorithms to calculate an SME’s overall financial performance,” Geller said. “This will transform SMEs. They’ll have direct links to EDGAR and to other jurisdictions for similar information. This is much different than a rating agency. We’re dealing with actual intelligence that can make companies better. Ultimately, this will improve the opportunities for small-to-midsize enterprises to grow their business. This could turn the tide of the decline in small businesses many developed countries have seen over the last decade.”
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