Considering the importance of a good business name, it is amazing how little time and effort many business people put into choosing their company?s name. This lack of forethought and planning in choosing a business identity is akin to building a home before checking to see if it is in a flood zone: At least, with the home, local governments have developed laws to protect homeowners from this foolishness. Spending a little time and thought about your business name BEFORE building your business may save you a great expense later on.
Why is Your Name So Important?
Your business name is the first image that your business projects. It is what customers will remember (good or bad) about your business that will either draw them to it or send them to a competitors? business. Assuming your business lasts for many years, you will have invested a lot of time and money building it. Part of the value of your business is the name. If you have branded the name, your brand alone might be worth more than the assets of the business itself. How much are the names: Harley Davidson, Star Wars, or McDonalds worth? If McDonalds decided to change its name to Fred's Burgers, it is obvious that the company would be worth far less than it is now. Why? Because, McDonalds spent a lot of time and money branding their business name on the public?s mind. Further, just opening up a McDonalds restaurant guarantees the company a minimum amount of revenue because of its name.
What You Should Look For In a Name
So, what should you look for when choosing your business name? Ask yourself the following 10 questions about your business name:
1.) Is it easy to remember?
2.) Does it tell people what your business does?
3.) Is the meaning confusing?
4.) Is it unique?
5.) Will your business or your market outgrow the business name?
6.) Can it be branded?
7.) Is anyone else using this name?
8.) Is it trademarked?
9.) Can you trademark it?
10.) Can you protect it in other ways?
Let?s look at each point individually:
Easy to Remember
Probably one of the most important requirements of a good name is that it is easy to remember. It shouldn't be complicated or very long. Just imagine someday your secretary answering the phones, "Good morning, Zvestsky, Commolowskivich, Bankoslovich, Karageorgadis & Associates." As much as you may want a particular proper noun in your business name, it may not be the best thing for your business.
Also, don?t try to get cute with the spelling of the name. For instance, if you want to be known as ?Elite Property Management Company?, don?t opt for ?Elit Property Management Company? because the domain name elit.com is available. This is confusing to most people who can spell and most your customers will probably spell your name, ?Elite? anyway. Remember, if your business name is not easy to remember and your competitor's name is, you will probably loose business to your competitor.
Describes What Your Business Does
A good business name describes in some fashion what the business does or what it is about. Here are some real life examples: Creative Walls & Spaces; Wine Fetish; Seven Seas Travel; and Running Paws. All of these names create an image and give a good indication of what service or products the business provides. Does your name do the same?
Many businesses lately have been choosing more contrived (sometimes called transparent) names. These are names that sound kind of sexy, but don?t really have a dictionary meaning. Some examples include: MICROFLEX; BIOGEN; OPTICON and SYNIVA. Since these names do not have a meaning, they can be branded to mean almost anything you want. The negative is that you will have to invest heavily to market your new brand so that it becomes recognizable.
Make Sure it is Not Confusing
This is similar to making it simple, but you also want to make sure your business name doesn?t confuse itself with a double meaning or bring up an image that is not conducive to your business. For instance, what business is, ?T&A Enterprises, Inc.? in? Maybe the owners? names start with ?T? and ?A? but it is too hard to escape the double-entendre for which this name implies.
Make it Unique
Often, a corporate or LLC name must be unique and must not be ?deceptively similar? to another corporate and/or LLC name registered with the state. The same line of thinking should be employed with your business name, even if it is not a requirement by the state. Another way to look at it is if your name is too similar to other names, will your customers confuse your name with another company?s? If they do, you may once again loose business to your competitor.
Is it Brandable?
When you think of Xerox, you think of copy machines; Poloroid and you think of cameras or film; Webster and you think of a dictionary. These are brands. Of course, these companies spent millions of dollars marketing these brands, which is one of the main reasons why they are so recognizable. Hotmail had no marketing muscle behind it. But, because of its name, the service the company provided and some creative marketing, Hotmail became so popular that millions signed up and Microsoft spent $millions buying the company. If your name follows all the rules of a good name, it too may be brandable.
Choose a Name Your Business or Your Market Won?t Outgrow
This is a little more difficult, because nobody has a crystal ball that works very well. For many businesses, to be around for five years is a success. Projecting your market, the longevity of your product and where your company?s focus might be in the future maybe a lot to ask when coming up with a name. However, pondering this subject cannot hurt. IBM was first known as International Business Machines, but it later changed its name because its business model changed. Keep this in mind when naming your business.
Is Anyone Else Using This Name?
So now you?ve chosen the best name for your business. Guess what, if it IS good, you can bet several other businesses are using the same name somewhere in the US.
To see if this is the case, check the following databases:
Locally: Phone book & County Recorders Office
Statewide: Corporation or LLC database & Database of trademarks or trade names
Nationally: US Trademarks, US phone books (i.e. yellowpages.com, anywho.com & qwestdex.com) & Domain name whois database
Even if others are using your name, you may not have to use your second choice just yet. Often, unless the name is a registered trademark, you may still use the name. For instance, if Bob?s Plumbing, Inc. is operating in Massachusetts and you want to form Bob?s Plumbing, Inc. in California. You can do so as long as Bob?s Plumbing is not a nationally registered Trademark. If Bob?s Plumbing doesn?t plan to ever expand past California, then this might be the best choice. However, if Bob?s Plumbing was planning on going national, choosing another name might be the best course of action.
Has Your Name Been Trademarked?
A trademark is a word, phrase, symbol or design, or combination of these, which identifies and distinguishes the source of a particular good or service. A service mark is for services. The United States Patent and Trademark Office handles national registration of a trademark or service mark.
If another company has registered your chosen business name as a national trade or service mark, then you will not be able to use it for your business. A court would consider it ?trademark Infringement? if the average consumer would be confused as to the source of the good or service sold. Even if you think your name is different enough from another company?s trademark that there won?t be infringement, go see a qualified trademark attorney before proceeding.
A classic example of trademark infringement occurred when an Arizona used car dealer called themselves, ?CARS-R-US.? They obviously didn?t believe that this would infringe upon the well-known mark, ?Toys-R-Us? but, Toys-R-Us felt otherwise and forced CARS-R-US to change their name.
Before you proceed, check USPTO?s database of trademarks to see if your name conflicts with another.
Can You Trademark Your Name?
If your name is unique, descriptive and has not been already trademarked by another company, you may be able to trademark your business name. Although only $325 to register, this is per each class of goods & services (you may want to apply for a trademark under multiple classes). You can get more information about getting a trademark (including applying for one online) by going to www.uspto.gov.
Although the only true way of protecting your name is by registering a trademark, if you are unable to do this, find other ways to secure your business name. Below are few ideas:
Register a state trademark (if available)
Secure the domain name
Secure the corporate or LLC name in your state
File Foreign Authority to Do Business in other states in which you may operate
These methods wont provide the same level of protection as a trademark. But, by securing the name, you are blocking a competitor from doing the same.
Whatever you decide to use for a business name, just be sure that you have spent some time looking at your options. Make sure you are choosing a good one, because changing it later could cost you your business!