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Companies House Data: Finding Clients for B2B Marketing and Sales

Kevin describes Etic’s methodology for interacting with Companies House data, using big data analytics to locate other sources which allow us to fill in the gaps.

In England and Wales, the Register of companies maintained by Companies House provides an invaluable starting point for identifying and locating businesses as potential customers for goods and services.

What it is not, however, is an accurate record of where they trade from and what they call themselves. Just as significantly, it records information on not much more than 50% of the businesses that the government knows are trading in the UK (ONS,2015).

Company Registration

Company’s house data forms the backbone of the contacts lists provided by many B2B businesses offering names, addresses and other details such as e-mail addresses for direct marketing purposes. The company’s house database is free to access for the company registration details of all Registered Companies in England and Wales. Right now there are more than 3,800,000 companies registered with company’s house. Each company has to provide the names and addresses of the company owners and directors and an address for the business, which may or may not be the same as the address or addresses from which the company trades. After registration, companies need to file accounts at fixed intervals. The nature of the accounts they file depends upon the size of the business and its structure. This collection of records is the largest of its kind and can provide the basis for collecting and organising focused lists of UK businesses for B2B communications. It is crucial however to understand how the register works, its scope and limitations if you want to use it, or lists derived from it, to support your B2B communications. That is the purpose of this brief note.

Forming a company sometimes called incorporation or registration is designed under UK law to create a legal entity with responsibilities in its right, it exists, in law as something entirely separate from the owners and employees of the company. Companies can take some different forms to reflect ownership and the purposes behind its formation. Consequently, companies registered at companies house do not all have the same obligations to report their ownership and accounts. Perhaps even more relevant, from B2B communications, many businesses trading in the UK, in fact, hundreds of thousands of them, are not registered and have no separate legal existence from their owners. Consequently, the companies house database cannot be used to provide access to these businesses.

There are various estimates of the number of UK businesses, usually smaller in size that is not registered with companies house. A recent UK Government publication stated that SMEs are a crucial engine for growth: 99.9% of the UK’s 4.8 million businesses are SMEs; they are responsible for over 14 million private sector jobs. The Office for National Statistics also supports the view that there are more than 1,000,000 active businesses in the UK that are NOT registered companies. As the public records that would identify these businesses, e.g., VAT and Tax returns are not in the public domain, then ‘finding’ these businesses presents some problems. New businesses are registering at a higher rate than ever before; 46,488 companies formed in England and Wales in September 2014. In the same month 118 companies went into administration, in 1,585 cases a liquidator was appointed. There were 539 petitions to wind-up companies, 360 winding-up orders issued and 1,385 resolutions passed to wind-up companies. In a relatively quiet month for business registrations around 2,000 businesses ceased to trade or at the very least stopped being a live prospect for (most) business services and products.

In September of 2014, the number of Dormant companies on the register stood at 454,049. In September 2014 the number of companies on the register that had been liquidated was 79,728. But they were all on the register. In total the register stood at 3,483,988 companies with a total of 2,808,973 listed as active.

Finding Businesses: What they do

The Standard Industrial Classification Code or SIC is the method by which all companies are required to identify their area of activity when they register the company. They have a year within which to choose a code. Consequently many companies and mainly newly formed companies do not have a code. More of a problem is the way that the system works when companies have chosen a category or code to describe their goods, services or other activities. The last substantial revision of the SIC system took place in 2007 after this date new companies have used the modern SIC methodology and classifications. There are three main problems caused by the use of SIC codes:

1) Many companies will offer 2 or more services or products from the classification system so a debt collection agency might also offer investigation or security services or for that matter run a call centre. Each of which activity has a separate SIC number. The company may have chosen one, two or more of the codes to identify themselves and the nature of their business. In any event, the SIC categories are not mutually exclusive in practice so determining what a company offers need not be straightforward.

2) Many companies opt to describe themselves, in effect as ‘other’. So for example in the category Administrative and Support Services, there are a subcode 82990 “Other business support activities” which has almost 200,000 companies using that number. The entire class of activities labelled Administrative, and Support Services has 44 numbers and covers 302,447 businesses. So the majority – 200,000 – categorise them as other!

3) Finally, the codes themselves do not map onto the words or ideas that might occur to people when they are looking for goods and services business that they wish to contact. For instance, what businesses are ‘other reservation service activities’, well some big companies are there, and they buy goods and services aplenty. But they do not travel agents, tour operators etc., etc. Similarly, management consultants do not include financial consultants, well not all of them anyway. Or you may need one of the hundreds of specialist and highly technical companies described as ‘other professional, scientific and technical activities’.

What we do

To manage this complexity, we have used two different technologies; firstly we look at how a company describes itself and then we use modern big data techniques to create a description you can use. This doesn’t mean to say we do not have the SIC code, just that we do not rely on it even when one has been provided, which is rarely the case with new companies in which we have a particular interest.

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