There are all sorts of reasons why any sensible company director will want an array of reliable information about a business which his or her firm may be considering whether to join in a commercial arrangement.
However beyond simply identifying potential risk, a sober assessment of another company’s real track record - taking into account its development history and future potential - can often reveal a more optimistic picture than a few bald financial facts may immediately indicate.
And while it may be crucial to use data to get a firm picture of another company there is also the risk that some strata of information may skew any good overall analysis if considered in isolation - so getting a “holistic” picture of a company’s performance is the ideal.
At a time when business is looking for every lever available to help it gain critical mass in difficult times it’s perhaps hardly surprising that increasingly potent information providers have moved quickly to fulfil this growing need.
The obvious starting place for data is companies house direct, which contains the backbone of the information made available through, for example, http://www.duedil.com, which has a growth strategy based on its service gaining widespread “brand recognition” in a relatively short space of time.
And it explicitly recognises in its name that the main aim of anyone researching company information is to find whether mutual endeavour is a safe and practical option.
“Due diligence” in assessing a potential trading partner is the must-have failsafe every firm aiming for expansion needs to have in place, and using good sources of information efficiently is part of that process.
The sort of data now readily available is designed to be easy to access, and to make it straightforward to deduce how obvious performance indicators are shaping up in the company concerned.
Inchoate information showing, say, that a company had a tough year and lost share, is worse that useless if different figures show the same firm turned its fortunes round by entering a lucrative merger deal a year later - everything has to be seen in proper context to be useful.
At the same time a firm pondering a business venture with another company will want an accurate picture of relative successes and failures within the venture.
It could be that a relative weakness can be solved fairly easily if the two firms are “a good fit” in business terms, and that the strengths can be maximised in a merged operation - but that sort of picture probably won’t emerge from standard accountancy alone.
From a data point of view, the UK is a good market in which to operate, with the great majority of home-based enterprises straightforward to research, and in fact where company data is concerned Britain has a technical edge over several other major developed economies.
This has also given the information providers a sound platform on which to develop sophisticated but accessible data systems designed to make “smart” company analysis a standard part of mainstream business practice.
For small business owners, who need the fullest possible picture of another firm, the key elements of whether a firm has other affiliations, how it is organised and how it is performing are all theoretically available - in most cases - through an informed search online.
Given the pressing need for just such a reliable service, we can expect the quality of business information to keep growing as the economy finally gains the momentum needed to struggle free from recession.