You’ve decided to chase your dream and form your own company. Congratulations! What’s the first item to tackle? For most entrepreneurs, task #1 is to select a company name to form the entity and become official.
It’s fun doodling logos and bouncing name ideas off of friends and family, looking for that name with the catchy story behind it. But be careful! While your name and story ideas might sound great during your initial emotional high, a quick decision could end up creating more long-term harm than good.
Most entrepreneurs choose their company name before they consider their competitive positioning, brand strategy, businesses growth potential or legal protection issues. We understand the urge to “name first and plan later.” It’s very natural. You can’t build a company with the name “To Be Determined.”
The key point to remember is that your company name represents your brand and creates your first impression with the marketplace. Most new entrepreneurs haven’t given careful thought to their brand, and find that a hastily-selected name often doesn’t fit down the road. It’s expensive, complicated and confusing to change a name after establishing a business. We’ve had many clients whose name hurt their ability to grow, but didn’t have the financial ability to change it. That’s a spot you don’t want to be in.
Here are 4 steps to take before you name a business:
1. Have your name represent your brand. Since your company name will deliver your first brand impression with your market, make sure that your name evokes your brand strategy. What promise should your name represent to your customers? If your brand was a person, what human personality traits would it convey? Match this to your list of potential names.
2. Evaluate the competition. Your competition should influence your naming strategy. Don’t make yourself look just like the other guys. Who will remember you? Stand out! List your competitors’ names, and see how you fit within the list.
3. Decide on your name type. Thinking about using your name for the company (John Smith & Associates)? That might work for an accounting firm, but it’s limiting to build a brand around you. Considering a creative name like Google? They’re easy to protect, but expensive to brand. Think about your market and marketing budget to decide whether you can afford to support a creative name. If not, try for one that evokes your brand promise.
4. Check for conflicts. Will your name sound too much like a competitor’s name? Could it conflict with another company a different industry? It’s important to consider this: Nothing’s worse than receiving a dreaded “cease and desist” letter a few years down the road for infringing on another company’s intellectual property. This can be expensive (best case) or fatal (worst case). Visit the United States Patent and Trademark Office site for more information. Consider using an attorney as well.
Now that you’ve considered the serious aspects to name a business, go ahead with the fun stuff–the brainstorming!
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If you’re in the process of naming your company or a new product or service, you’re going to invest a lot in that name. You’ll spend tangible dollars on brochures, signs, marketing collateral and stationery; there are also intangible costs like name recognition, brand equity & goodwill.
