Looking for feed back on a new idea

[phanio]

I am considering developing a business financial measurement product. And I am looking for some feed back.

The idea is to have an online portal that measure the financial health of a business – regardless of stage or industry and make recommendations for improvements – kind of like having an in-house CFO.

Businesses could either up load financials or input key figures. The system would run analysis on the financials – compare to peer – as well as forecast based on past trends and give essentially a financial check up on the business with recommendations in several areas like safety, liquidity, operating performance, cash flow and growth.

This would not be something that would have to be purchased liked a software package – it would be completely online.

It would either be free or subscription based – not sure yet.

Feed back questions:

What are your thoughts?

Would you use something like this?

Are there key areas of your business that you would like to know more about from a financial prospective?

Is there something I am missing?

Have you seen other products like this – either software you have to buy or online like I suggest?

Thanks – any feed back is appreciated – even negative feed back.

[vangogh]

Sounds like a good idea. The comparable application is Mint (http://www.mint.com/), which is similar except for personal finances. If you don't already have an account there you may want to get one to get some ideas.

I'm not sure there's a specific area I need to know more about. I think it would be more what do I do with all this data I have. If you can find a way to make suggestions and educate me about my business finances that would be helpful. I get the feeling most small business would be in the same boat. We understand our finances to a degree, but sometimes can't cross over from managing them the way we manage our personal finances.

[Harold Mansfield]

Sounds pretty good to me. I actually like the idea.
Where do you get all of the metrics for comparison data?

[KristineS]

It sounds like a good idea.

The only thing that would concern me would be security. Before I uploaded my business information I'd want to be beyond sure that the site was as secure as it could be.

[Spider]

On the surface, it sounds like a good idea but I'm not so convinced that many would be interested. I'd like to see some examples - like --

...Company A entered $xxxx and $xxxx and $xxxx and the application told them that this and this should be done for this reason.

etcetera.

[phanio]

Thank you all for the feed back and concerns. I don't have an account with mint.com - I can do all of that on my own and have for years - but, it did give me some ideas. I thought if they could get individuals to provide access to their personal bank accounts and credit card information - then maybe businesses would be willing to share information as well. However, I would never use mint.com just because of my own concerns about security.

Thus, my idea would allow the user to either provide full data - on a secured system - or just provide financial information without any personal or business info - just numbers. I hope it is understood that if they put garbage in they will get garbage out.

There are several metrics of comparison already in existence from Robert Morris or D&B – plus, as this project moves along, it could keep statistics (not individual information – but statistics about companies in certain industries in certain regional locations) – thus providing its own comparisons.

There are certain metrics that you might already calculate – even if not formally like ROI or ROA – but, there are also basic measurements that many business owners overlook like current and quick ratios, debt to equity, gross and pre-tax profits – which are very easy to calculate but can be hard to understand or counter if they are trending in the wrong direction (which this system would be provide advice for). But, there are other measures that many businesses fail to understand or don’t even realize exist like liability impacts or sale impacts that can really show the health or decline of a business or even for those that are growing – are they, based on their total financial health, growing to fast or too slow – or, even measure that look at how well a business is managing its cash flow – not just from a collection point of view but its total asset / liability management.

I would also love something to play with – but, I am just in the discovery stage – trying to get some initial feed back first – before outlining any functionality.

But, I really appreciate your feed back. Most of the time, during inquiries like these, you get a lot of naysayers – which can be both good and bad – but, it is refreshing to hear a resounding positive view.

Again thanks – if you think of any measure that you would like to know more about in your business – please, let me know.

[vangogh]

I would never use mint.com just because of my own concerns about security.

Keep in mind you'll be asking your users to trust you with security (at least in one of your scenarios) in regards to their finances. If you wouldn't feel comfortable doing that as a user I don't think you're going to convince others to trust you. Your feelings are going to get out there whether you realize it or not.

[phanio]

Vangogh - you are probably right or that my concerns about security will be reflected in the steps I take to protect other's information.

My main concern about Mint's security is not really giving them my information but them being attached and my information (bank accounts, passwords, credit card data) falling into the wrong hands. At least with this concept, all I would have is financial figures not accounts numbers or passwords.

I have other issues with Mint.com besides just security - in my opinion, and maybe I am wrong, but I think that they are just a new form of affiliated marketing - past affiliated marketing was based on banner or text links, email messages or in your face sales letters - all touting someone else's product for a small commission.

Mint does the same thing but they just dress it up a little more fancy. They get your personal financial information - package it back to you in graphs and charts that really don't do anything - then look for ways to get you to switch to other products (products that may help you or may not) but products that will definitely help them like new savings accounts or new credit cards or new investment accounts - anything that they can earn a $50 to $150 commission off of.

I do give them credit in the fact that they may be able to save you some money by switching and that they actually do the shopping for you - saving you time - but, I don't like to place my faith in the hands of a company that makes money by referring me to products that make them money.

I guess it could be a good tool as long as people don't follow it blindly and do their homework before switching or buying a product they recommend.

Other companies are doing the same thing like LowerMyBills or BillShrink - they either capture your information or have you input it them recommend your switch to you purchase products that may or may not be in your best interest.

Regarding finance (personal or business) I would rather see more people actually take the time to learn how their assets (money in this case) can work for them or against them. Its the old saying "give some a fish and they eat for a day; teach them to fish and they eat for a lifetime"

Part of our current financial woes in this country stem from people just blindly following the advice of someone else - some who as alternative motives or personal agendas. If we could just teach people to take control of their financial lives - this crisis might not have happened or might not have had the lasting impact we now are feeling.

Thus, my idea. Although it not meant to teach business owners how to spread, size and calculate their financials - it will be designed to teach them how to look at their past performance and make true financial decisions.

But, I do appreciate the feed back. I hope that those that read this post get motivated and pull their financials and see if they can spot ways that might improve their performance.

[vangogh]

I share your concerns about the security. It's not as though I'm a member of Mint either.

I hadn't realized they point you to products and make money off the sale. That does call into question any advice they give. Not that they're giving bad advice. Naturally the more money their customers can make and the better their finances are after joining, the better it is for Mint.

With your idea I can see two ways of going about it. One is to charge a recurring fee either for the information itself or for doing something along the lines of what Mint does. You don't have to go the affiliate route if you're not comfortable with it. As long as you're providing enough value people should be fine paying for continued access.

The other option is to basically blog all the information. You'd be giving it away free in order to build a community around the site. You'd need to find ways to set up a business model around the free content. Naturally advertising and affiliate marketing are two options, though I'm assuming neither is something you'd want to do. You could create products that would match the interests of your community. Tools to help them manage their finances. Informational products like ebooks, etc.

I think your idea is good and I think there are a lot of small businesses who could use the information. The question is really how to set it up and what's going to be the money making part.

[huggytree]

would businesses actually give you all their financial info?

i dont think i would give anyone i dont know my info over the internet

[vangogh]

Plenty of people give their financial data to other businesses. I assume you keep money in the bank. You must trust them. Most banks, at least the larger ones offer online banking, which many people use all the time. PayPal seems pretty well used and they connect directly to your bank account so you can transfer money back and forth. And I mentioned Mint above which people trust with all of their personal financial information.

You may not trust companies over the internet. It's certainly you're right not to, but many people already do and many more people are trusting them everyday. Naturally the company needs to earn your trust. You wouldn't give the information over to just anyone. Again though you trust your bank. Why? They must have done something to earn your trust. Online companies can also earn a person or businesses trust.