How Does a Business Background Check Work?
Performing Business Background Checks
How does a business background check work? A business background check lets you check the public records of any company you might be doing business with in the near future. Any public corporation or for-profit business is going to have roots in its local community, and companies in most regions of the world have to conform to local laws, customs and codes.
A business background check lets you research a company’s past conduct, just as you would investigate an individual or private citizen. This goes beyond checking the local newspapers for bad press, since businesses tend to show up more often as ads than news items in publications.
Once you know how to perform a comprehensive business background check, you’ll be able to know the company you are taking on as a client, customer, business partner or tenant is on the up-and-up.
Contact the Local Chamber of Commerce
Contact the relevant Chamber of Commerce, including your local CoC and the Chamber of Commerce in whichever community the business you’re checking on is located. This should provide you not only with basic information like “years in business”, but also feedback and stories about the ownership and their business practices.
Contact the Better Business Bureau
Also contact the Better Business Bureau, which will keep a record of complaints and bad reports on the company you’re investigating. While a Chamber of Commerce is in the business of fostering commercial deals, the BBB is a watchdog group, and therefore the information you get there is going to be invaluable to your evaluation.
Whenever you search the background on a business, do like I always say with personal background checks and get all the information right. You don’t want to read a bunch of complaints about the Acme Ice Cream Company, when you were wanting to read about the Acme Shoe Company.
Research Their Business Contacts
Talk to the business partners and business contacts the company you are researching. The owners of this business are going to tout their own commercial relationships and cultivate references, so you can easily learn whom these people are and what they really think about this business.
Look into their partners (and better yet, their former partners), employees and ex-employees, creditors and former vendors. Call the business’s references and see what they have to say.
Search the Property Records
Searching the property records of a company lets you see how they do business and what property or assets they own. Read our article on “Property Records” for ideas on how to search old property documents.
Visit the Court Sites
Visit court sites or the County Clerk of Court’s website or office to research the legal background of this business. You’ll be able to read about any court filings this company might have been involved in during the past. You might find documents on lawsuits, bankruptcy records, tax liens and court judgments on this business.
These people will tell one story, but the court documents will show an entirely different story. I knew one company that continually got into lawsuits with their former clients. These people seemed to be able to drum up new customers always and I’ve often wondered why prospective business partners didn’t do their due diligence on that business.
Conduct a Credit Report Check
You can perform a check on the credit history of your potential business contact, something many people forget. There are business credit ratings you can look at.
While you’re searching the credit reports, consider comparing these against the annual report compiled by the company for public consumption. Once again, compare and contract the public relations information with the real facts.
How to Perform Business Background Checks
As you can see, there are countless resources for performing business background checks on companies you do business with. Do your homework and never walk into a situation with a business you haven’t thoroughly researched. Good luck.
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This entry was posted on Thursday, February 18th, 2010 at 1:02 am and is filed under Background Checks, Business Records, Private Investigation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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