This document provides an agenda and overview of a presentation on Business Link Northwest's Business Performance Index (BPI). The BPI is a data warehouse that combines various business data sources to provide decision support for planning interventions. The presentation discusses how the BPI can be used to identify high growth companies and struggling businesses through commercial segmentation and risk profiling. Identifying these companies early allows support to be targeted effectively and outcomes measured. Segmenting the data further by region increases the relevance for decision makers.

1. Business Link Northwest's
Business Performance Index:
Data Driven Decision Support
Monday16th November, 2009 @ 9am
Neil Geoghegan – BLNW Corporate Resources Director
Tel: 07833 726 200 E-mail: neil.geoghegan@businesslinknw.co.uk
Ged Mirfin – BLNW Chief Data Officer
Tel: 07876 047 165 E-mail: ged.mirfin@businesslinknw.co.uk
City Office Park, Bluebell Way,
Preston PR2 5PZ
United Kingdom
Track S: Supporting small business development world-wide
Presentation (S1) to the
1 INTERNATIONAL ENTERPRISE PROMOTION CONVENTION
st
best practice and innovation in the creation and support of small
businesses world-wide
15-17 November 2009 - Harrogate, North Yorkshire, UK

2. Agenda
• What is the BPI
• Demand Pull Marketing
• The Search for Context 1: Growing our way
out of Recession – the Search for High
Growth Businesses
• The Search for Context 2: Delivering
Support to Struggling Businesses

3. What is the BPI
• Nationally Recognised “Business Objects” data base
covering businesses in the North West.
• An “evidence based” system that draws its base
data from different sources into a “data warehouse”.
• It is used to inform decision makers about planning
interventions or policies.
• Is fully compliant with Data Protection legislation
• Is the central repository for Business Link data and
the primary source of our Management Information
• A system that can map the main business
classification systems to the language used in Local
Government and Business Support
• The first B2B profile driven database in the
public sector

4. History of the BPI

5. We incorporated Business Link universe and
Experian’s National Business Database into the BPI

6. We incorporated Business Link universe and
Experian’s National Business Database into the BPI
Section of database
unique to Business
Link – Lifestyle and
Grey economy Consolidates North
businesses
West Business
19k 111k Universe
406k

7. We incorporated Business Link universe and
Experian’s National Business Database into the BPI
Consolidates North
West Business
19k 111k Universe
406k
Of 150,000 Penetration Impacts Added to CRM over last 18
Months, 120,000 were part of
Experian Prospect Universe (80%)

8. Demand Pull Marketing:
Using Data to Drive
Direct Marketing

9. Demand-Pull Marketing – Public Sector
• Historically public sector organisations have
concentrated on service delivery rather than
the end user.
• DPM is ultimately about adapting to local
demand
• DPM involves identifying & unlocking the
latent demand for a product or service rather
than the generic product push marketing
message typical of many public sector
organizations

10. Marketing Approach
• Intelligent marketing content can
be tailored to suit what we know
about end users
• The “Marketer’s Dream” - to be
able to target segments and
communicate with them on
a one to one basis.

11. Truism:
If Segmentation and Context
= Relevance
Relevance = Engagement

12. Why is it context important when Making
Decisions?
Experience- Evidence-
influenced based
Aim: Change
Experience
from Anecdotal &
Judgmental to
Evidence-based
Decision making
Opinion- Evidence-
based influenced
Evidence / Information

13. The Search for Context 1:
Growing our way out of
Recession – the Search
for High Growth
Businesses

14. Which Companies Will Lead Us Out Of The
Recession?
• Some Economists believe that 50% of new jobs will be
from less than 1% of a regions company base.
• High Growth companies (Gazelles) will increase
Turnover by between 25% and 30% in the next 4
years.*
• Although Employee Growth will lag behind it is likely to
be in the region of 20% per annum.*
• Can Public Sector support agencies stimulate growth
and ensure that Gazelle Companies fulfil their
maximum potential?
• Can Public Sector support agencies engage effectively
with these companies and should we try?
• What is the potential impact?
*NESTA – “Measuring Business Growth: High-Growth Firms and Their
Contribution to employment in the UK” – Oct 09

15. Tracking Gazelles
• Route out of recession is to back gazelles
• A gazelles are defined as small, fast growing companies (in reference
to the fact they can jump higher and run faster than their peers),
• Gazelles according to one accepted definition are defined as
companies that have experienced at least 60% growth in employment
and additionally deflated turnover (turnover adjusted for inflation) over
a 3 year period.
• But…they are extremely difficult to spot
• In the current economic climate especially so….
• Many Gazelles caught in the cross-hairs as the economic recession
continues to find its mark wounding some, badly disabling others and
bringing an unfortunate minority to their knees
• 3 Years Growth is now more likely 2 Years Growth and 1 Year
of Decline
• Some Gazelles are now not able to run as fast or jump as high
• Even in more favourable Economic conditions trained
Business Hunters found Gazelles difficult to target:

16. Which business groups could be potentially
high growth?
High technology
knowledge –based
Independent businesses
businesses
Scientists, technologists
Niche activities or and/or academics
specialised product
offerings within older
or traditional
industries
Advanced
manufacturing
using precision
technology
Based on specialist
industrial parks and
technology centres Newer
businesses do not
have SIC codes
Entrepreneurial

17. What is Commercial Mosaic?
•Commercial MOSAIC is a business classification system
•Categorises UK businesses into 13 groups and 50 distinct types,
based on key variables that influence business behaviour
•It uses a descriptive naming convention
•Commercial MOSAIC segmentation system
includes:
•Demographics – Age of business, number
of employees, turnover, principals’
background
•Classification – Businesses with shared
demographics are grouped together
•Propensity – Broad description of the
classification that indicates a business’ likely
behaviour, for example, in its purchasing.

18. The Family or Genus Gazelle
Commercial Mosaic Commercial Mosaic Features
Group Type
Directors under 30 & Well Educated
Highly productive and skilled work force
Mature businesses -64% Employ >100
Monumental Monoliths Farsighted High Flyers Large Range Business Activities inc. Food, Manufacturing, Textiles, Recreation,
Sport, Luxury Goods – Niche Business
Trade Specialist Industrial Centres or Retail Parks
Highly specialised type engaged manufacture specialist equipment and precision
instruments esp. telecomms & IT
Specialist Suppliers Hi Tech Highlights Medium Sized Businesses
Independent
Based Specialist Industrial & Technology Parks
Newer Independent Businesses
High Risk – 30% Chance Failure
Wide Range Activities: Specialist Wholesale, & Retail, Business Support Services
Independent Entrepreneurs Developing Dynamos & Recreation
Small Business but with Very High Amounts of Turnover from Highly Skilled &
Productive Staff
Especially Prevalent in North West
New Independent Businesses. One Third 2 to 3 Years Old
So New many not have SIC Codes assigned to them
High Risk – 346% Chance Failure
Independent Entrepreneurs Wide Range Activities: Specialist Wholesale, & Retail, Business Support Services
Fledgling High Fliers
& Recreation
One Third Grow to Employee Much Larger Nos. of Employees
As Specialist Suppliers first move is generally to specialist industrial parks
Independent Low Risk High-Tech Businesses
Engaged Diverse Range of Activities but esp. R&D and Chemical Processing,
Energetic Enterprises Professional Professors Especially Prevalent in Northwest Trading from Specialist Industrial & Technology
Centres near Universities & Hospitals
New “Knowledge-Based” Businesses
Especially Prevalent amongst Digital & Crossover Media, Support Services to
Energetic Enterprises Support Supremos Financial Industry – High Salaries
Low Risk Businesses in Areas of High Prosperity. Serviced Offices

19. The Power of the BPI: Identifying Potential High Growth Companies
How do you Identify a…
North West Actively Trading  company that is potentially
Business Locations (428,963) high growth?
 By using a commercial
classification system or…
MOSAIC Gazelles (69,297)  our experience from activity
on the ground?
 …that is mature…
Age Over
Three Years (18,874)  …with a reasonable
turnover…
Turnover  …employing 10+ people?
Above £400k (1,474)
Employing 10+ (445)
What do these look like?
-Business Link has intensively assisted 10.8% of these companies

20. The power of the BPI: are these companies
healthy?
Risk Profile Percentage Using Experian Commercial Risk Scores
7.73% 16.14%
2.50%
31.59%
42.06%
Suppressed Low Risk Average Risk High Risk Very High Risk
NB: The standard Very High Risk commercial profile
across the North West as a whole is 20.44%

21. The power of the BPI: in which sector are
these companies?
RES Sector Profile Percentage Using BPI
10.23%
1.82%
42.05%
23.18%
4.09% 15.00%
3.64%
Advanced Engineering and Materials Biomedical
Business and Professional Services Digital and Creative
Energy and Environmental Technology Services Food and Drink
Non RES

22. The power of the BPI: where are these
companies?

23. The power of the BPI: where are these
companies?

24. The power of the BPI: where are these
companies?

25. The power of the BPI: identifying potential high growth
companies
-This information is based on data provided by Experian. The data has been subject to further analysis by Business Link North West

26. The size of the prize – economic impact
High Growth Companies
445
Average Headcount
Current Headcount
3 Year Headcount Growth
New Jobs Average Turnover
Current Turnover
3 Year Turnover Growth
New Turnover
Estimate Estimate
120%
25
11,125
13,350 £1.0m
100%
£445m
£445m

27. • Gazelles require much more complex
kinds of support placing much higher
levels of demand on Public Sector
Agencies than heretofore?
• Gazelles are “Elite Businesses”.
• Supporting them is resource
intensive requiring prioritization at
the expense of existing Business
Sectors!
• This is by its very nature Elitist!
• Should We Be Doing This?

28. The difference with Gazelles is not the type of question
they ask it’s the complexity of the issue they face…
Category of Assistance Gazelle Specific Example
R&D, Innovation and NPD Collaborating with local Higher Education Institution in
Grant Funded R & D Knowledge Transfer Project
Sales & Marketing Market Scoping Research Project on Need for Specialist
Footwear for those who suffer general foot discomfort in
order to offer products into the mainstream market
Training & Skills Training of Specialist Staff working in the construction,
manufacture and assembly of equipment in the Nuclear
Industry
New Machinery, Process Improvement, Retooling Improvement Production Processes in Specialist Marine
Manufacturing Company producing products for the
offshore oil extraction industry
Capital Expenditure Access to Finance for Relocation Precision Manufacturing
Plant
Relocation & New Premises Consolidation of Manufacturing Plant on Single Site
Location including relocation Welsh Manufacturing Plant
to North West
Export JV in Eastern Europe
Relationship Management, Networking, Membership Obtaining Membership of and Maximising Network
Cluster Organizations/Networks Opportunities through the Northwest Aerospace Alliance

29. The Search for Context 2:
Delivering Support to
Struggling Businesses

30. Context: Delivering support to businesses in
the current economic climate
• Problem 1: Identifying Struggling Businesses
• Problem 2: Finding them early enough. There are No Second Chances
in a Recession!
• Problem 3: Economic Impact on Key Business Segments. How badly
have they been and what is the likelihood of Commercial Failure? Can
Business Support can make a difference?
• Problem 4: Policy Makers don’t have context to Make or Measure the
Impact of Policy
• The Answer: Commercial Risk Data is available that offers up-to-the-
minute, granular information on the Risk of Commercial Failure –
Experian’s Commercial Risk Profiling System offers this service.
• The Outcome: The ability to Trend this Data means we can flag
companies that are in decline as well as those experiencing growth.
We can also highlight which of these companies have received
business support and are now experiencing recovery.

31. Commercial Delphi Risk Categories
Risk Category Description
Failed/serious
Administrator or receiver appointed, bankrupt proprietor, dissolved business
adverse info
High value of unsatisfied CCJs, accounts overdue, start-up business with adverse data,
Maximum risk
proprietor with adverse data or maiden accounts show loss
Large company with weak balance sheet, medium sized firm with very weak balance sheet,
High risk
combination of above average risk features, start-up with adverse trading
Large company with very weak balance sheet, medium to small firms with (high levels of credit
Above average
search, payment difficulty, weak balance sheets), start-up firm without adverse information
Large business with weaker balance sheet/modest loss, SMEs with steady trading, small firms
Below average
with directors with good record, no adverse data
Well established, accounts filed, mid to large firms with £1m of assets and £5m of turnover,
Low risk
good record, directors with strong records
Minimum risk Large well established firms, strong balance sheets, low value of public information

32. The Commercial Delphi risk profile of the North West
Below Average Above Average Dissolved/Seri
Very Low Risk Low Risk High Risk Maximum Risk
Risk Risk ous Adverse
Info
North West 5.40% 10.77% 22.88% 21.12% 8.71% 15.74% 1.12%
Merseyside
4.86% 8.88% 19.83% 22.34% 9.52% 18.48% 1.15%
Warrington &
Cheshire 4.98% 9.72% 25.36% 20.99% 9.50% 12.73% 0.85%
Cumbria 7.88% 14.20% 25.00% 19.52% 5.40% 8.41% 0.45%
Lancashire 5.94% 12.80% 25.62% 21.74% 6.68% 12.19% 0.85%
Manchester 5.04% 10.25% 21.27% 20.38% 9.75% 19.27% 1.52%
One Size DOES NOT fit all

33. Further segmentation increases relevance
North West
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.40% 10.77% 22.88% 21.12% 8.71% 15.74% 1.12%
Greater Manchester
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.04% 10.25% 21.27% 20.38% 9.75% 19.27% 1.52%
Manchester
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.43% 7.50% 17.46% 18.13% 10.96% 25.43% 1.94%

34. Analysis of the Manchester segment increases
relevance further
Manchester
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.43% 7.50% 17.46% 18.13% 10.96% 25.43% 1.94%

35. Analysis of the Manchester segmentation increases
relevance further
Manchester
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.43% 7.50% 17.46% 18.13% 10.96% 25.43% 1.94%
Manchester – Maximum Risk Businesses
Number of
Risk Micro Band Percentage
Companies
1 2,235 29.47%
2 644 8.49%
3 1,203 15.86%
4 2,201 29.03%
5 1,300 17.14%

36. Analysis of the Manchester segment increases
relevance further
Manchester
Dissolved / Serious
Very Low Risk Low Risk Below Average Risk Above Average Risk High Risk Maximum Risk
Adverse Information
5.43% 7.50% 17.46% 18.13% 10.96% 25.43% 1.94%
Manchester – Maximum Risk Businesses
Number of
Risk Micro Band Percentage
Companies
1 2,235 29.47%
2 644 8.49%
Drill into the highest of the high risk
3 1,203 15.86% Businesses in Manchester
4 2,201 29.03%
5 1,300 17.14%
1,270 Businesses & 6,002
Employees in Non RES
Sector in Micro Band 1

37. So What Did We Do Next?
 We Contacted all the Business and Professional Services
Companies affected
 Highlighted the 3 Current Issues in the Financial Markets that
are causing concern:
 Liquidity
 Trade Credit Insurance
 Payment Terms from Primes
 Offer: Specific Advice, Access to Finance, Cash Flow
Management, Business Performance Benchmarking, Loan
Guarantee Scheme
 Key Point: These Products already existed. The Delivery of the
Message and its contextual relevance unlocked latent demand

38. Specific Example of an Intervention
• Anne Example Ltd - Poultry Farmers
• Problem: Erratic Payment Patterns from Primary Customer
• Symptoms: Fluctuating Overdraft Levels – Breach of banking
Covenant
• How Do We Reach This Customer?
– Generic Thematic Marketing from a Brand that is Poorly Understood?
– Or, Specific DPM Activity highlighting Root Causes and Commonality!
• Marketing Content: Sector-Wide Issues with Payment Problems.
Best Practice Solutions within Industry Sector. Specific Solutions
available from BLNW to Help Solve Problem.
• Outcome: Proprietor Entered into Contract Negotiations with Buyer
included Strengthened Contract Clauses re: Payment Terms. Joined
Pressure Group to Ensure Business Segment Voices Heard.
• Result: Improved Cash-Flow.

39. Measuring Impact Over Time
Sample of 5 companies Commercial Delphi risk score over last 6 months
120
Commercial Delphi
100
Score Trends
80 Britplas Ltd (Int
Assisted)
60 Stanley Securities
CCTV Ltd (Int
Assisted)
40
Arena Plastics
Limited
20
Distant Horizons UK
Ltd
0
ServiceAir UK
15/03/09
29/03/09
26/04/09
05/07/09
16/08/09
01/03/09
12/04/09
10/05/09
24/05/09
07/06/09
21/06/09
19/07/09
02/08/09
-20
Date

40. Benchmarking Against Sector
Performance
Commercial Delphi Risk – Sample of Companies Intensively Assisted Compared to the Merseyside and
Greater Manchester Average (Last 12 Calendar Months)

41. The Challenge…
How can we work together
to ensure that we
combine intelligence
with the experience we
have in a particular
region?