Dun & Bradstreet recently introduced its COVID-19 Impact Index. It helps businesses understand COVID 19 impacts.
Dun & Bradstreet’s research found that 90% of businesses across the United States have been impacted. As well, a full 43% of businesses in Pennsylvania, New Jersey and New York were even challenged to stay open.
Dun & Bradstreet COVID Index
Restaurants, some retailers, real estate places and beauty shops were impacted the most.
At the other end of the scale, 83% of the enterprises in places like Vermont, Wyoming and Minnesota have the lowest impacts on the index.
Small Business Trends spoke with Brian Alster, General Manager of Third-Party Risk & Compliance at Dun & Bradstreet about the new research.
“We started with some simple health scans,” Alster says. “When we started to put this information out, clients started to say: ‘This is really helpful but it’s starting to lead to more questions.’”
The Index started as a way to highlight impacted companies and their network of suppliers.
Alster says companies want to know exactly who they were affected by. They also wanted more detail so they could take action.
Dun & Bradstreet had a leg up here. Alster explains:
“We started looking at our traditional risk scores,” he said. “Dun & Bradstreet is a commercial risk company. We have data on how companies interact with other companies.”
He says the effects of COVID-19 started to become very noticeable around March. He provides a historical perspective from 2008 that ties into this modern disaster.
“In 2008, small businesses were first to be impacted. They were also one of the last to come back,” he says.
“We wanted to provide an additional layer of insight that traditional data didn’t show.”
He stresses the index is a supplemental source. It adds further insight to their existing risk scores. The Index provides an overview of COVID-19’s impact on business operations including customers and suppliers. It deals with fluid conditions and ranks businesses in relation to one another.
The lower the numbers, the higher the impact and corresponding risk.
Therefore. One is the highest risk and 100 represents the lowest In the end, it’s a relative ranking that clusters businesses together to give a snapshot of their health.
How It Works
Different pieces are involved. Alster explains how these all work together to provide a fluid snapshot.
“What we do is we look at two different assessments,” he says. “The first is how is the company doing. The second deals with the network that company is interacting with. It’s a relationship grouping of all the different businesses that that particular enterprise works with.”
That breaks down into looking at several different factors.
The first is a location impact taking into account different ideas and government restrictions plus confirmed cases and growth rates of COVID 19.
The second is an industry impact. This is based on a company’s industry and if it is essential or nonessential. Whether it is online or brick-and-mortar matters.
Survive A Disaster
The company health impact uses some other preexisting Dun & Bradstreet scores. These predict how well any enterprise will survive a disaster. These are basically credit scores. They look at the financial stability of a business.
Finally, there is a network impact. This umbrella view includes customers, suppliers and other third parties.
Here’s what happens when you put everything together.
“When you start to see how all this interacts, you get to paint a picture,” Alster says. “ “You begin to see that a company in New York City in retail may be preforming differently than the company in the exact same industry with the exact same profile in North Dakota.”
That means if you look at an industry across several locations, you can see how the pandemic plays out in different areas. The relationship between companies is important.
“It’s important to see how all of these factors comingle,” he says. Finally, Alster makes a few more important points.
Not a Score
“Remember, this isn’t necessarily a score. It works best when comparing businesses ,” he says. “If I were to look at a small business that was a pizzeria, we would be able to stock it up against all the other pizzerias in the US or its location.”
Plans are in the works for a bigger space for small businesses.
“This is a fluid environment,” Alster says.
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It is important to track how far the impact of this has reached. This is so you can adjust based on the times.