While many business-to-business companies use the internet as a way to gather information on the individuals and organizations they interact with, the web can reveal much more than an address, phone and basic facts on the products or services offered. Before getting into business with a company, it is important to do your research—and the internet makes that easier than ever.
Search engines such as Google are now a valuable vetting tool to gauge the risk of doing business with a new customer. Aside from the information you may uncover from a search engine’s results, social media sites such as Facebook, Twitter, LinkedIn and Yelp can also be used to cross-check information and determine the legitimacy of an organization.
Learn the basics
Begin by finding out how long the company has been in operation, who the leader is, and what sort of goods and services they provide. Verify that the information is up-to-date and check to make sure it is consistent on each site.
Start with the company’s website and determine if it appears professional and informational. Then, consider checking reviews of the company. People that interact with that company are likely to post their positive and negative experiences, which can allow you to see how they are perceived by others. If you are unable to find out any information online, it could be a sign the business doesn’t exist, hasn’t been operational for very long or has recently changed names.
Find out who you are dealing with
If you receive a large order online or over the phone, check out the address on Google maps. Does the address indicate a real office or is it in the middle of a parking lot? When dealing with international clients, it is important to know that some countries are a higher risk than others. High-risk countries can be determined by checking the Corruption Perception Index, which measures the perceived levels of public sector corruption in 176 countries and territories.
Aside from looking into the business and its location, consider running a search on your contact at the organization and/or the person who is ordering the goods or services. If the Facebook profile or LinkedIn account says the person is younger than 18 then it is safe to say this is not a prospect. If their profile says they are in a different location or with a different company, it can be a red flag or a simply a sign that they don’t update their information regularly.
Many businesses of all sizes are creating Facebook pages to stay in touch with their customers and connections. It can be valuable for you both as an individual and as a business to “like” the pages of the companies you are interacting with on a regular basis.
Not only will “liking” the Facebook pages of your clients show them you are interested in their businesses, it will also keep you informed of any news, events or promotions that are taking place at the company. Although these updates are often good natured, they can also alert you to any red flags you should be aware of such as a sudden clearance sale or sudden move. Doing a big clearance sale on Facebook can be a red flag for credit managers and collection people that the client may be having cash flow issues. Also, if you have a client that suddenly closes the company’s doors and moves to another city, their Facebook page will often show where they moved to so that you can collect any debt owed.
Ask detailed questions
Although internet research can provide a wealth of knowledge, sometimes it can be just as valuable to ask your potential client questions about your concerns. It is important to know who you are dealing with to protect your own business from the hassles of non-payment, fraud and other undesirable situations.
Robyn Barrett is founder and managing member of FSW Funding, formerly Factors Southwest LLC, specializing in factor financing for small to mid-size companies. For more information, visit www.fswfunding.com.