You can monitor the competition and ensure your business is protected from any fallout in a volatile economic environment.
If we look at Carillion, for example, they ended up carrying more debt as a business every year than the total worth of the business. Contracts were woefully underperforming and the business needed to re-evaluate and reassess how they could continue to grow. Financial mishaps such as this would have been flagged, had someone been monitoring the financial and current changes of the company using a scoring model.
Taking this data and gaining knowledge from it shouldn’t be a secret, yet many businesses fail to best use this information and can fall on hard times. The following outlines how you can use data for business success to stay in-the-know and perform better.
Credit monitoring involves utilizing a number of data sources to track the financial information of businesses, which is then analyzed through artificial intelligence (AI). You may wish to do this to gain insight into your supply chain, as it can allow you to create a protection bubble purely through your informational advantage. For example, if you see that a key supplier’s credit score is falling you may wish to review this partnership and negotiate different terms.
What triggers a credit score decline?
Whilst a weak credit score is one key indicator of predicting potential business failure, there is also a number of other financial considerations you should be looking out for:
- Financial Decline
- Late payments to suppliers
- Completely missed payments
- High amount of debt
These factors don’t automatically mean that your business, or a competitor, is heading down the wrong path, however, they shouldn’t be ignored either. Credit monitoring and credit scores will scrutinize these sorts of datasets for you, and artificial intelligence will be able to help you understand the numbers and what that could mean for your business.
Understanding the cosystem
Regardless of your business size, you can use credit reporting to understand who is checking your credit file. With this, you can understand who potentially wants to work with you or whether key competitors are interested in your finances. Whilst there is only a limited amount of information shared, it’s a key method to understand the ecosystem you’re a part of. You may even begin to find new partnerships purely through those who are engaging with you at this level.
Whilst credit monitoring should be supplying you with accurate data, you can also take another approach. Utilizing free online tools like Google Alerts can give you competitor insights as they happen, emailing you any time a competitor features in the news, for example. This can be useful in hearing about industry developments or even specific business acquisitions as soon as they get released. This can then help you to react with your own growth strategy.
Checking a business’s social media pages can be a quick win. If you see that posts have suddenly stopped it may be an indicator that budget has been reduced or moved away entirely from social media marketing. Often, marketing is one of the first budgets to be hit by poor financial management. LinkedIn can also offer information if employees are openly posting about moving away and changing job roles. Within LinkedIn, you can see the names of business owners which can be effectively coupled with a google search. This can allow you to see if data is accurate regarding key stakeholders in the business. If this differs and doesn’t match, there may be something untoward occurring with the management of a business. This sort of open data investigation can assist you with business partnership decisions and can ensure you know who you are dealing with.
If you are engaging with your own business data, you can pick up on things like contracts consistently being paid late, or margins not being scrutinized, and review can take place sooner rather than later. Business intelligence can come from something as simple as a Google search, but for those who want to interrogate their environment with a secure financial granularity, looking into credit monitoring could be a wise business decision.