D&B Viability Rating™
Do you have a viable business?
Is it capable of growing, functioning, and developing as an independent entity?
These are important questions any business, investor, or business partner would want to know prior to doing business with you. While you may be familiar with D&B’s Paydex® Score, which is based on your company’s payment performance, the new viability rating analyzes the current and future health of your business.
The D&B Viability Rating™ is one of Dun and Bradstreet’s newest rating tools, and offers a complete assessment of the current and future health of a business. With this new rating scale a business can quickly determine if a business customer is viable and has potential growth opportunities.
In a nutshell, this new rating enables a business to better decide whether or not to do business with a customer, prospect or potential business partner. While there are other ratings such as the D&B Supplier Evaluation Risk Rating™, which is for supplier risk assessment, the viability rating is geared more towards assessing business engagement. For other predictive analytics offered by D&B you may find this Quick Reference Guide helpful.
What makes up the D&B Viability Rating™?
There are four many components which consist of the following:
1) Viability Score – this score is based on a scale of 1-9 with 1 being the best and 9 the worst. The score compares the business with all U.S. businesses in D&B’s database and predicts whether or not the business will voluntarily or involuntarily go out of business, become dormant or inactive, or file for bankruptcy within the next 12 months.
2) Portfolio Comparison – this score is based on a scale of 1-9 with 1 being the best and 9 the worst. The score compares the business with all U.S. businesses in D&B’s database with the same *model segment classification. In this comparison only businesses that provide financials with no trade lines or existing trade lines are used.
3) Data-Depth Indicator – this is based on a letter scale of A-M with A providing the greatest amount of data on the business such as financial statements, trade activity, etc. For greater insight into how this rating works be sure to review the D&B Viability Rating™ Quick Guide.
4) Company Profile – this rating is based on a scale of A-Z with A being identified as a strong and well established business. Basically, it takes the company profile as a whole and rates how well established the business is based on factors such as financials, trade payments, years in business, and company size.
*Model segment –the data used to classify these segments include financial data, limited trade lines, established trade lines, and business activity.
So how can you achieve a positive D&B Viability Rating™?
While some factors, such as comparable data, are simply beyond your control there are certain factors in the viability rating that you can directly influence. These factors include but are not limited to the following:
- The industry classification code you select
- The number of trade credit lines reporting on your D&B profile
- The age of the trade lines you have reporting
- The number of years you have been in business
- The number of employees you have working for the company
- The gross annual sales of the business
- Whether or not you submit financials to Dun & Bradstreet
As the business environment is rapidly changing, creditors, businesses, potential business partners, and investors are looking for ways to better predict which businesses will last longer. The D&B Viability Rating is a tool that can provide answers to critical risk questions on the current and future health of a business.
As a business owner it’s vital to not only focus on establishing a positive Paydex® Score, but to maximize your company’s D&B Viability Rating™. This can be accomplished by forming an in depth company profile with financials, growing sales revenues, and establishing positive trade lines.
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About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in ‘Fox Small Business’,’American Express Small Business’, ‘Business Week’, ‘The Washington Post’, ‘The New York Times’, ‘The San Francisco Tribune’,‘Alltop’, and ‘Entrepreneur Connect’.