The BizFilings blog covering business tips and trends.
What’s in a Name? Choosing the Best Company Name
Published on Jun 27, 2013
Read our article, 'What’s in a Name? Choosing the Best Company Name' at 'Time to Start Up,' the small business blog by BizFilings.
You’re an entrepreneur with a savvy, unique idea and a passion for success – all you’re missing is a name for your ingenious soon-to-be company. When first incorporating your business, determining a name for the company can be the most difficult decision you face, as the name of your business is likely the customer’s first interaction with the company. The name of a company can ultimately be ‘make or break’ when pertaining to the ultimate success of the incorporation. Although entrepreneurs frequently find the process stressful, it is one that cannot be avoided. Below are some helpful hints to remember when choosing the best name for your company.
How do I name my company?
Do you want your company name to be abstract, keeping customers wondering what exactly your business sells or provides? Alternatively, do you want the name of your corporation to be intuitive – the moment customers see your business name, they know what to expect? Should the name be made up, or should it be a word we could find in the dictionary? Regardless of what path you choose, your company name should be memorable.
Ask yourself some questions regarding your future company. You may find that the answers help mold your business’ name:
• What kind of customers are you trying to attract? What you ultimately name your company may be based off of your company’s audience – are you targeting teenagers, middle-aged women or the elderly? All demographics will have different preferences, and will accordingly be attracted to different corporation names.
• In what industry is your business? What is your company culture? Its mission? Think critically about how you want your company to be perceived, as well as what you wish it to achieve.
• Does the name even appeal to you? If you find the names you’re throwing around in your head difficult to say or annoying to repeat, consumers will likely feel the same.
• Avoid acronyms: Consumers will look at your business name and think it’s meaningless.
• Avoid puns: Puns in companies are risky. Forming a corporation is difficult enough – why take any additional chances?
• Don’t copy others: Be an original, instead of another face in the crowd trying to keep up with the big guns in your industry.
• Keep it simple: Because coming up with a name IS such a stressful process, entrepreneurs tend to over think the name.
• Test your company name: Consult friends and family – ask for their honest opinion.
If you don’t trust yourself – or those surrounding you – to come up with a name that will stand the test of time, consider enlisting an expert to, at the very least, set you in the right direction. Naming firms provide burgeoning startups – or companies looking for a name refresh – elaborate systems for creating names. The benefits? Naming firms know the ins and outs of trademark laws, and can advise you, based on years of experience, which names will work best for your company and which may mean you never get your company off the ground. The downside of naming firms is cost, as a professional firm may charge upwards of $80,000 to help develop a name. Although there are certainly services available at a lesser price, you may not receive the quality advice you would receive by paying a large fee.
Have a Backup Plan
Before you start printing business cards, determine whether your business’ name is available, as there are legal factors entrepreneurs should consider when choosing a company name. Even if you’re not ready to incorporate or form a limited liability (LLC), it’s a good idea to reserve your business name – and it’s allowed by most states. It is actually very important to reserve your company name, because the name of a corporation (C corp or S corp), LLC, limited partnership (LP), limited liability partnership (LLP) or nonprofit incorporation must be distinguishable on the records the state government. What does this mean? When registering a company, the name cannot be substantially similar to a business name already in use. If the name is not unique or if it is already in use, the state will reject the formation documents.