For a small business, dealing with a company that is not genuine can be devastating. A supplier that does not exist, for example, can cost a small business time and money. Dealing with such a company could even doom a small business that lacks the funds to make up for losses. Checking out a firm before doing business with it is vital – but it is not as easy it may seem. Fortunately, sources do exist to help you determine whether a business is genuine, or whether to just walk away before you get burned.
Search the Better Business Bureau
Type the name of the business in the "Search For" box at the top of the Better Business Bureau's search page. Type the city, state or ZIP code in the box at the top right of the page. You can also type in the company's email address or even its phone number, which will bring up only the specific company for which you are searching.
If the name of the firm you are researching is somewhat common, the search may bring up many listings. Type "Microsoft," for example, and you will see 37 listings, some for the well-known computer company in Redmond, Wash., but others for firms in a variety of locations, not all of which are not Better Business Bureau accredited.
If the firm you are seeking is part of such a listing, check its rating and ask the company about any complaints that have been filed against it. Firms are rated on a scale of A+ through F so you can instantly see if there are any problems.
Check Out a Company Online
Use due diligence firms such as Glo-Bis to find provide information about any company around the world, including balance sheet information, income statements and litigation records. Fees start at around $265.
The U.S. Department of Commerce also provides reports on businesses throughout the world, through the website Export.gov. The reports, usually delivered in about 10 days, include information on the name of the business, address and key contact, type of business, number of employees, year established and business/financial reputation.
Check firms such as Dun & Bradstreet to purchase informational and/or credit reports on U.S. or international firms.
Check EIN Status
Check the company through its employer identification number or EIN. Virtually all businesses have to have this nine-digit number that the Internal Revenue Service uses to identify the tax account of employers and some small businesses that have no employees. Search for the company through its EIN at websites such as EIN Finder.
If the company says it does not have an EIN, ask why. Also, search companies through their state tax numbers to determine if they are genuine.
Free Business Name Search
Check the company's address and phone number. Check that the phone number and business match through sites such as White Pages. Type in the company's phone number in the site's reverse phone directory. This will bring up the address of the company. If the address does not match the information you have been given about the company, ask company officials about the discrepancy. If the company cannot explain the discrepancy, such as the existence of multiple locations, there may be a problem.
Check references. Sometimes, companies will supply references/reviews on their websites. If so, ask for a contact number and call or email the person or business giving the reference. Or, ask for references, including phone numbers and email addresses. If the company has no references or refuses to provide some, choose another company.
