Until now, most data about small businesses has been of poor quality; the data is typically outdated, inaccurate, and sparse in coverage.
Bad small business data presents a big problem. Without fresh, accurate data, financial service providers can’t understand their customers and thus can’t provide solutions that serve the varying needs of small businesses. This leads to less capital distribution, burdensome customer experiences, and limited product choices for small businesses, which represent close to 50% of US private-sector GDP.
In our data-driven world, why is it still so difficult to get accurate data about small businesses?
There are many reasons why getting accurate data about small businesses has been difficult, but they can be distilled down to three key challenges: data freshness, data accessibility, and the tremendous diversity of small businesses.
Small business data is often outdated, sometimes by as much as a year. Small businesses are also dynamic -- some grow or fail so quickly that the information they report is not accurate for very long. Small businesses also face fewer regulations, so they have fewer reasons to report data. Data latency is also exacerbated by long lag times from both public and private data providers, who do not always update their data frequently.
Accessing small business data presents challenges; reporting requirements vary state-to-state and business-to-business. Generally, small businesses are required to report far less information than larger businesses. Even when reporting is required, public data is not always digitized for easy consumption.
Diversity of small businesses
There is so much diversity within the 30 million small businesses in the US, yet they’re often grouped as one category. Consider how different a new software startup is from a local grocer with 50 employees, and how these differences would be reflected in each company’s respective data footprint. Small business diversity results in significant variation in terms of what data is – or isn’t – reported by each small business.
All of these challenges are particularly acute for new businesses, those with less than $5M in revenue, and sole-proprietorships.
Enigma has developed expertise in addressing the challenges of data about small businesses, and recently released a new reliable and easily accessible small business data resource.
“We recognize that all small businesses are not the same,” said Craig Danton, Chief Data Officer at Enigma. “We’re building a data set that recognizes those distinctions. We focus on finding more sources of data and keeping them fresher, so you can find information about even the smallest businesses.”
To provide fresh, accurate profiles of small businesses, Enigma draws upon thousands of public, online, and private sources – including new, alternative sources that have never been leveraged for small business intelligence before. Our data processing infrastructure minimizes data latency and enables rapid updates to ensure our data stays as close to source truth as possible.
Reliable small business data is possible, and now it’s available to you. Instantly access our small business data by exploring Enigma’s Businesses API, which provides a range of free and pay-per-call data points. For a quick look at our standard SMB data, you can look up any small business right here.