Episode 1: The Life and Death of a Business
George L'Heureux:
Welcome everyone to Data Talks. I'm George L'Heureux, your host. I'm a principal consultant for data strategy here at Dun & Bradstreet on the data advisory services team. We're looking forward to having these discussions and talking to some of the experts on our data strategy team as we go through the course of the year, and our first guest for this show is going to be Dave Stulack. Dave Stulack is a data strategy consultant on the data advisory services team here at D&B. Dave, tell us a little bit about what you do in your role.
David Stulack:
Sure. Thanks. Thanks for having me George. In my role, I help our customers maximize the Dun & Bradstreet data and also the other assets they may have within their organization and without. Basically, I kind of piece together all of those items that help a company be more productive or more profitable.
George L'Heureux:
What got you interested in this type of work?
David Stulack:
I've been with D&B my entire work career. So I guess all of my training has been leading up to this one moment where I've learned a lot about the D&B data. Over the last 10 years or so, I've learned a lot about customer data interacting with customers and then putting those two things together, I think I could really make an impact for our customers.
George L'Heureux:
So as you and I were preparing and talking about all the different things that could be important to our customers, you brought up the idea of the life cycle of a business. Tell me why is understanding the life cycle of the business so important?
David Stulack:
Yeah. It's really important because it will dictate how we interact with customer suppliers and prospects. It's going to be different depending on what stage of life they're in. We may work differently with a start-up than with an established multinational corporation or a company that's teetering on the brink of closure. Knowing where your customer or supplier is helps you make these sorts of decisions.
George L'Heureux:
So let's dive into that a little bit more. You kind of talked about it a little bit, but what are the different stages of a business's life cycle that we think about when we're talking about a lifecycle in general?
David Stulack:
Yeah, sure. We usually refer to the beginning as kind of the birth of the business or start-up, as you had mentioned. There's a time where a business is established going through the ups and downs with normal business on maybe not every year's a great year, some years are better than others, but in generally, it's kind of stable or growing. And then at some point, some businesses may experience a decline, which could lead to the death of a business where it actually stops doing business.
George L'Heureux:
I mean, what would cause that to happen? I mean, we've all seen it. We see stories about businesses that go out of business. We see bankruptcies, but I imagine that's not the only way that businesses end up dying as you put it.
David Stulack:
Yeah. There's a number of different ways businesses may stop operating. Owners could close up shop. One example may be, they've kind of been in business for many years. They just decided to retire and kind of move on and kind of enjoy their golden years.
David Stulack:
There's another sort of closure that's maybe less thought of as a closure, but when a business gets sold or merged into another business, that's what we kind of consider mergers and acquisitions. That's kind of where one business may cease to exist and another kind of continue on with them being absorbed. Then there's also the bankruptcy, which results in a restructuring or insolvency. On some occasions, a business may also be fraudulent, which they're really tough to detect, but we have a lot different signals we monitor to let our customers know if there is possible fraud.
George L'Heureux:
So it sounds like you were kind of starting to talk about this a little bit, but what are those types of signals? What tells us where a business is in that lifecycle? How do we know that it's just getting started versus maybe in that established and growing phase? Even more basically, how do we know that a business, say, ‘gets born’ to use your term?
David Stulack:
Yeah. Lots of times a business may be operating before taking the official steps. A couple of different examples might be Aunt M is kind of knitting scarves, maybe a very small business, maybe not even thought of as a business. She may not go through the official steps of establishing that. Then, there's other businesses where they start up, maybe not intending to continue on, but things become very successful. Then, they take the necessary legal steps to kind of bring that business into being.
George L'Heureux:
So that's being born. On the other end of it, you kind of started mentioning this too. What are those types of signals that we're looking for that wherever we get them, however we hear about them, that would tell us that a business is maybe close to ceasing its operations, or is in that period of decline that you talked about?
David Stulack:
Yes. So we at Dun & Bradstreet have a number of ways to kind of keep a pulse on the heartbeat of the business, as we might call it. Decline of business activity is a really good example, which may be a decrease in sales or reduction in number of employees. We also have many different newsworthy feeds that could announce a loss of a large customer or some kind of department from the federal government, or it could also be an unfortunate natural disaster.
George L'Heureux:
But we're not necessarily taking any one of those as being definitive proof of one thing or another. I imagine that's sort of a preponderance of the evidence, I guess you might say, to tell us where things are at and for us to sort of give our best guesses where a business is in its lifecycle, right?
David Stulack:
That's exactly right. And within our data supply chain, we have a number of different algorithms that kind of piece all these things together to let a customer know what's kind of the end result of these different events. And then also, I may be brought in as well to kind of use my expertise to kind of diagnose and kind of model, in some cases, what's most likely to occur on a customer's portfolio.
George L'Heureux:
So we go through all that there. You have these signals. Dun & Bradstreet, for example, can help to coalesce those signals into some sort of an alert or a trigger or some status maybe even. You might dig in and get a little bit more personal with the data and figure out what it says. So we know where they are at now in their life cycle, or we know where we think they're at. How does that help our clients?
David Stulack:
Yes. So it helps the customer and we give them the right information, it could be as simple as a score, or it could be some consulting services where there's more of a kind of two-way conversation, but it helps the company or customers ultimately take the right action depending on what's happening. If a customer is declining, they may be in danger of not getting paid right for goods and services. If they could take action sooner rather than later, they may have a better chance of recovering some of those accounts receivable.
David Stulack:
On the other side, if a business has been sold, the successor business could offer a great opportunity for that company. Maybe it's a small company that was acquired by a very large company. Now, you kind of a foot in the door for this very large company where it could lead to more opportunity.
George L'Heureux:
And I guess on the other side of that, if you don't have this type of information, if you're not privy to where we think a particular company is in its business lifecycle, I imagine that's probably putting your own business a little bit more at risk because you don't have the information that you need to make the best decisions that you could.
David Stulack:
Yeah, absolutely. On the risk side, as I mentioned, the accounts receivable balances may kind of go up, right. Usually companies have kind of a limit with most of their customers, but in tough times, they may kind of allow those limits to be surpassed, especially in the environment we're in now. But companies may waste a lot of time and resource trying to go after that money when quite frankly, there could be no hope, that the company may have already closed up. So it's very important to know where they're at in that cycle or how close they may be to closing.
David Stulack:
On the other side, a sales and marketing type use case, you may be trying to sell products and service to a company, spending a lot of time and resources sending sales folks out when we're able to do so. And basically, quite frankly, they're unable to even buy those goods and services. And you may also miss out on opportunities where a company is entering some kind of growth phase where you want to kind of get in early, so when they're looking to grow, you could offer your goods and services and kind of grow along with them. That's kind of the dream. Basically, it comes down to using your resources more efficiently to reduce costs and maximize opportunities.
George L'Heureux:
Right. I mean, you said it. You took the words out of my mouth. It comes down to this cost versus benefit balance that you have to do, and the more information that our clients have, the better they're going to be able to weigh the potential benefit against the costs that they're going to have to put in to trying to get that done. Right?
David Stulack:
Right.
George L'Heureux:
So we talked about it in kind of general terms. We touched on a little bit about what D&B can do in terms of the data assets that we have and some of the modeling and the consulting work that we can do. Can you dive into that a little bit deeper for me, how we can help our clients?
David Stulack:
Yeah, sure. So we refer to generically all the things that we kind of gather, all the different pieces of the puzzle as signals and the signals that we typically really keep a close eye on are public filings, such as suits, liens, and judgements, velocity of trade, which is basically accounts receivable. We take all those pieces in and we model that information. We could deliver something as easy as a numeric score, kind of on a scale from zero to five, one to 10, that can indicate growth decline or inability to pay bills. That really helps our customers kind of see a trend if they're kind of trending up or trending down, might give them a tip as to where the company is heading.
David Stulack:
We also ingest thousands of newsworthy sources and those newsworthy sources kind of point to a merger and acquisition, layoffs, and we also attract a lot of address changes. A company could be moving, and the reason they may be moving is either to go to a smaller or larger location, that could indicate some kind of increase or decrease in viability and even knowing the business industry could help apply macro trends.
George L'Heureux:
So that's really interesting and kind of specific, but really interesting the type of data that D&B can provide to help here is you might even be looking at a company that's moving from a 40,000 square foot facility to a 20,000 square foot facility. And you could indicate that that's a signal of where they're at in their business life cycle potentially.
David Stulack:
Right. And they may also be purchasing another location. So maybe they're growing and now they just need additional space. So we could actually add another address or a site and make that connection.
George L'Heureux:
There's a ton that sounds like it's here and a ton of different ways in which you and the others on our team are able to help our clients. If there was one thing that you want your clients and anyone who's watching or listening to this to kind of come away from this discussion with, what would that one thing be?
David Stulack:
Yeah. There's so many different pieces, but I think I would boil it down to, you need to know where your customer supplier is in their life cycle. That's really going to help you deploy your resources, and what we kind of talked about throughout this whole interview or conversation is it'll help you be more effective and perhaps more profitable.
George L'Heureux:
Well, thanks, David Stulack, for joining me today on Data Talks and sharing what you have to know about the lifecycle of business with all of our viewers, all of our listeners and sharing your expertise over all these years.
David Stulack:
Thanks, George. Thanks for having me.
George L'Heureux:
Hopefully you enjoyed this episode of Data Talks. I'm your host, George L'Heureux, a principal consultant for data strategy here at Dun & Bradstreet. We're going to have more of these coming throughout the course of the year, and watch and listen to each episode as it comes out. If you're looking for more information on how Dun & Bradstreet can help your business to succeed more at what it's trying to do in terms of its business goals, we encourage you to visit www.dnb.com or to reach out to your sales associate for more information. Thank you. Look forward to seeing you next time.
