We can see why Check Business were one of the finalists for Tech City News' startup competition Elevator Pitch; they help smaller firms check their clients and suppliers credit score. It's a simple way of checking if people who said they were going to pay you, can actually afford to pay you. We talk to founder Conrad Ford about raising money for his business, what he said to Mark Carney and how he helped one small business identify a shifty client.
Find out more about Check Business and follow them on Twitter @CheckBusinessUK.
How did you come up with the idea for Check Business? Can you tell us a bit about your business journey?
We were running another business (www.fundingoptions.com) and realised that we were wasting a lot of marketing time, energy and money contacting SMEs who didn't need our services at that particular time. We wanted to come up with a way of building early engagement with SMEs so that when the time was right they'd think of us.
One of the features of fundingoptions is the ability to connect your online accounting data to speed up a finance application. From there we decided to build on the idea of connecting your data to create helpful tools for managing your business. Before we knew it our little idea had a life of its own and Check Business was born.
Check Business helps smaller firms take control of their business credit score, and to use this data to run their own business better and to decide how to interact with their trading partners.
You’ve got backing from a VC fund and Angel investors? How did you manage to secure this? What difference has it made to your business?
I was fortunate to connect with a couple of Angel investors who agreed to support the original business, Funding Options, before we even launched. I very much believe that we’re at an inflexion point in financial services in the UK. Small firms are moving their businesses online, meaning their business data is also moving online. There’s an opportunity to disrupt this market and make a real difference. Our original vision and everything we still do today aligns to that aspiration. I managed to meet Angel investors who shared my view of the future and were willing to back this with investment.
From there we had to make significant progress before securing VC investment. One piece of advice I was given early on was this: Go out there and meet VC firms early on. Tell them what you’re going to deliver, and then go do it. When you come back 6/9/12 months later having done what you said you would, your story and your business make a much more believable investment.
If you were stuck in a room with Vince Cable and George Osbourne, what would you tell them?
I’ve been lucky enough to be able to speak to a couple of senior policy makers directly so they already know what I would say! Last year I met with Mark Carney to talk about what he could do to support smaller businesses, and subsequently I’ve been attending the HM Treasury / BIS round table discussions on Bank referrals - ‘platforms for rejected SMEs’.
I then wrote an open letter to Mark.
What kind of businesses will find Check Business particularly useful?
Any business that trades with other businesses will find Check Business useful, but in particular those who extend or rely on trade credit.
Actually if you use online accounting software such as Xero, FreeAgent or Sage One then you can connect Check Business with your accounts to see the risk profile of your currently outstanding invoices.
We differentiate ourselves in this space by doing two things:
i) We give away credit score information totally free of charge; you don't even need to register to see it
ii) We have partnered with a major credit reference agency, Equifax, and are open about the fact that it's their scores we are sharing. This is important because these are the same scores that bigger businesses use to make decisions about how they'll interact with SMEs (eg how much they'll lend to them, if they'll extend trade credit, what rates of interest they'll charge, how much insurance premiums should cost) and by openly publishing this information we're helping SMEs to understand how their business is viewed by others.
Can you give us an example of how a small business has been helped by using Check Business?
Yes, it’s sort of a funny story! Shortly after we launched we had a phone call from a small business owner who was using our free alerts service. They’d just received a risk alert about a client who owed them money – the alert said that the client’s business status had gone from ‘active’ to ‘dormant’.
The reason we think it’s funny is that the business owner had called us to report an error with our system. They told us that their client definitely wasn’t ‘dormant’ because they were still doing work for them!
Once we double checked the data and confirmed that our alert was correct they were in a rush to get off the phone so they could ring up their client and find out what’s going on.
I don’t know what happened, but I do know that this was one small business owner who was suddenly armed with information they needed to head off a potential bad debt. Imagine if they’d kept doing work, then sent an invoice at the end of the month, then tried chasing 30 days later when it was unpaid. It could’ve been months before they realised there was a problem.
What’s next for Check Business?
We're still a relatively new business and are growing really fast. Over the next several months we hope to achieve the following:
- Maintain our double digit week on week growth
- Contact hundreds of thousands of businesses to help them see what information is available online and help them to take control of their credit profile
- Develop partnerships with large scale providers of SME services to offer a wider range of services tailored to the particular business size, sector and phase in their lifecycle.