Understand Company Risk Levels with Beauhurst
Discover how businesses can protect themselves from financial risk and reputational threats with our risk data.
Sometimes, unpleasant surprises come at the worst time.
Say, that key supplier is liquidated and your dream client doesn’t actually have the money they say they had. Ultimately, this makes for unreliable cash flow forecasting — and it’s a huge time-sink for your team.
Being able to identify these risks ahead of time, however, empowers you to tackle financial and reputational risks head on. And at Beauhurst, we’ve developed a function to help you do just that.
Meet Risk Signals — our latest addition to Beauhurst Signals.
What are Beauhurst Signals?
We know that just having data isn’t the answer — you also need to be able to interpret it. That’s why we created Signals as a way to make our data easier to understand. We have five groups of Signals that indicate whether a company has a particular characteristic. They are:
- Growth
- Innovation
- Environmental
- Social & Governance
- Risk
Beauhurst Signals mean that our clients don’t need to be data analysts to do sophisticated work, they just need to hit a few buttons.
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What are Risk Signals?
Risk Signals are markers that flag companies that might be under financial scrutiny or operational pressure. For many businesses — particularly in the current climate — it’s vital to know of any red flags ahead of time.
For example, when you’re assessing a new supplier, client, or partner, you need to know how reliable or reputable they are before you engage with them. Likewise, understanding if an existing client or supplier is experiencing financial difficulties is vital for businesses to reliably forecast cash flow and assess risk.
So, we introduced Risk Signals to Beauhurst. They are tagged on company profiles, so our clients can look up a business and quickly understand whether it has one of four Risk Signals.
Liquidation and insolvency
Highlighting a company’s liquidation status
CCJ
Companies with outstanding county court judgements (CCJs)
Short runway
When a company has fewer than 8 months of reserve cash remaining
Down round
When a company’s valuation is lower than a previous round of fundraising
What Risk Signals mean for you
Risk management plays an important role in operational activities, including our own. PwC’s Global Risk Survey 2023 corroborates this, estimating that organisations are 2.6x more likely to improve financial performance due to effective risk mitigation.
And because our product team is constantly working to improve our platform and add more relevant datasets, it was natural that we would also add data that enables teams to comprehend risk. As a result, in early 2024, we added Risk Signals to help our clients get the crucial financial risk data they need, quickly and clearly.
As of May 2024, there are over 211k companies with at least one of the four Risk Signals. Of the 211k companies with Risk Signals, you can filter this by industries, location, size, turnover, patents, and much, much more.
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Who are Risk Signals useful for?
In short, everyone. Because risk is everyone’s business.
But to illustrate how to get the most out of Risk Signals, here are a couple of examples.
Investment opportunities
For investors, companies exhibiting Risk Signals can indicate new opportunities. If a company is in financial difficulty, investors may be able to snag a bargain buy-out and turn the company’s fortunes around. This is one of the reasons why private equity and venture capital subscribers use the BeauhurstInvest platform as part of their day-to-day operations.
By setting up a collection of companies in the platform, investors are able to automate the prospecting process by setting parameters that automatically notify them of interesting companies.
Understand prospective clients
For many organisations — particularly higher education institutions and local authorities — understanding the clients they’re working with is vital, particularly when the public purse is involved.
At Beauhurst, we help our clients to protect themselves from financial risk and threats to their reputation by providing the up-to-date data they need to make informed decisions.
A brief guide to Risk Signals
If you’re searching for a specific company, you’ll find Risk Signals at the top of the company’s profile page under the Signals header. These will only appear if the company possesses a Risk Signal.
However, you can also search for companies that have specific Risk Signals and view them all as a group. For example, if you’re a local council looking for companies that may need additional business support, here’s how you’d do it.
This simple search reduces 4.6m companies down to a fraction of that number, showing that there are 823 companies in Lambeth with a Risk Signal. You can then use this information to reach out to the companies concerned to offer any relevant additional support from local government schemes.
Of course, this is just one example of Risk Signals in action, but if you’ve got a specific question, we’ll have an answer. Simply fill in the form below to book a meeting directly with our team, and you can ask your questions directly.
FAQs
We’re happy to show you around the Beauhurst platform — just book a meeting with one of our experts who will talk to you about subscription options.
We have a different methodology for each signal.
Liquidation & insolvency, which demonstrates the risk of closure, is based on the following Companies House statuses. If a company is classified under one of these criteria, it will receive this risk signal.
Administration order
Administrative receiver appointed
Administration
Moratorium
Voluntary arrangement
Liquidation
Companies with outstanding CCJs (County Court Judgements) receive a CCJ signal. Whereas the Registry Trust keeps company CCJ data public for the full six years, we choose to remove this signal when the CCJ has been satisfied. You can read more about this in our article on how to find companies with CCJs.
Short runway is assigned if a company has fewer than eight months of cash runway. This is calculated by dividing total cash by net cash flow (before financing). Exceptions include if a company has undergone an acquisition, secured a fundraising, or received a grant after the year end of its latest accounts.
Finally, Downround is assigned when a company’s most recent pre-money valuation is ≥10% lower than the pre-money valuation of its highest-ever valuation. We calculate this via a combination of SH01 (share allotment) data filed with Companies House and our own internal share allotment review process.
Nope! As a Beauhurst subscriber, you automatically get access to this data.
Simply log in as normal and you’ll find ‘signals’ under ‘add company criteria’ in Advanced Search. You’ll also see them at the top of each company profile page, just beneath the company description.
If you have any questions or want to talk to us more about it, contact your Account Manager or Client Experience Manager.
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Want to get ahead of financial risk? Fill in the form below to book a meeting directly with one of our team members.