Measuring business potential

Discerning between up-and-coming businesses on the verge of world domination and those merely destined to meander along is far from an exact science. Some, however, are starting to suggest that this needn’t necessarily be the case.

Led by James Raath, Surrey-based Calibre-Elite believes it has developed a method of measuring business potential and assessing the competitive strength and sustainability of growth businesses. The idea, says Raath, ‘is to measure the entrepreneurial flair of an organisation. It’s not just about those at the helm but everything that firm does, even the way in which a receptionist answers the phone.’

Using anonymous questionnaires to assess the entrepreneurial spirit of individuals right throughout a business, Calibre-Elite then calculates an ‘E-Rating’, which is designed to ‘represent the potential of that venture to make money.’ A rating of 0.725 or above (the scale runs from 0-1) suggests a firm capable of achieving long-term sustainable growth. A score of 0.5 or below, meanwhile, indicates that existing revenue streams could be at risk.

Having initially trialled the system with several blue chip companies in his native South Africa, Raath is now looking for validation in the UK and has already teamed up with London Business School to this end. ‘Over the next two or three years were hoping to test the scale with around 200 companies. We started working with the business school in April and several AIM companies have now signed up as well.’

Whether the notion of E-Rating takes off long-term, remains to be seen.

Leslie Copeland

Gordon Yost

Leslie was made Editor for Growth Company Investor magazine in 2000, then headed up the launch of Business XL magazine, and then became Editorial Director in 2007 for the online and print publication portfolio...

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