Plenty of businesses have failed to thrive, not because they had a bad business model or inferior products, but because of a poor choice of business name.
Your business name is a primary component of your brand and will be the foundation on which a reputation is built and grown, so it needs to be memorable and easily distinguishable in the cluttered and competitive business landscape.
Your business name is often what differentiates you from your competitors in the eyes and minds of your target audiences. Customers and potential customers make an immediate emotional and intellectual association with your business when they hear, see or read your name and therefore it must resonate with them in a positive way.
And that’s why choosing a business name isn’t an easy process and nor is it one which should be taken lightly.
This article unpacks some of the factors to consider and key principles to follow when choosing a business name in order to set your venture up for success.
Factors to consider when choosing a business name
- The nature of the business
- Future growth plans
- Ease of use
- Legal considerations including trade mark registration
Principles to follow when choosing a business name
Don’t choose a descriptive name
A generic or descriptive name is likely to fade into the background, whereas a distinctive and catchy name will stand out. Business owners often presume they need descriptive names to be found. In reality, a distinctive business name that is promoted in combination with descriptive terms is a better option.
Keep it simple
If your business name is too complicated, too long, too wacky or too difficult to pronounce or spell, people are unlikely to remember it and won’t be able to find you very easily. A good rule of thumb is to test your proposed name/s with your friends and family and gauge their reaction. If you have to spell it or explain it, or if it gets you some funny looks, it’s back to the drawing board.
Don’t be a copycat
Make sure the name you choose doesn’t resemble your competitors’ names in any way. Not only is being a copycat poor form, it sends a message that your business is not likely to be innovative and authentic. It also leads to consumer confusion which will be detrimental to your new business. As we discuss below, copying another’s name (or using something very similar) can also have legal ramifications.
Don’t use your own name
It may be tempting to use your own name to headline your new business, but it’s not a good idea unless you are an established brand like Harvey Norman or Dick Smith. Personalising the name of a business is restrictive and may be problematic when it comes to diversifying or selling your business. Your own name is also unlikely to tell potential customers anything about your brand – unless you are called Rosie and you’re opening a floristry business.
Avoid acronyms on their own
Most of the well-known acronyms in the business world originated from full names, for example KFC (Kentucky Fried Chicken), IBM (International Business Machines and BMW (Bayerische Motoren Werke GmbH), but an acronym on its own for a new business is not likely to make sense to your target audience. Branding is about communication and so your business name should tell your brand story in some way.
Test your name in online searches
The Google® internet search engine (and other search engines) are a primary vehicle for people to find businesses, so before you commit, it’s a good idea to test the name in online searches to see what comes up.
Make sure the domain name and social media account names are available
It can be hard to find a domain name that matches your desired business name, but your online presence is vital so it is really worth finding one that’s consistent with your intended brand identity. This isn’t easy as so many domain names and social media names are already taken, so you will need to be creative. If you see one or more that are a good fit and search-friendly, it is probably worth your while buying them.
Check whether your business name or company name is already registered
The ASIC website has a list of all registered company and business names, so it is worth checking to see if any duplicate names exist.
According to the ASIC website, it is a legal requirement that a party carrying on a business using a name must register that name, unless it is the party’s individual name, a registered company name or the full name of a partnership. In other words, you don’t need to register your business with ASIC unless you are conducting business under a name other than your personal name.
It’s also important to know that a business must have an ABN or be in the process of applying for one with the Australian Business Register website before ASIC will register a business name.
Importantly, even if the name you want to use is available to register as a business name with ASIC, this does not mean it’s safe to use that name as the business name exists for trading purposes not for creating ownership and rights to the use of a name.
Check whether your chosen name has been registered as a trade mark
Generally, multiple businesses can actually trade under the same name (or similar name) unless a particular name has been registered as a trade mark in relation to the goods or services that the owner uses its trade mark in connection with. It is good practice to do a trade mark search with IP Australia to find out if your intended name has already been registered as a trade mark – and you can either do this on your own or get help from a trade marks attorney. A thorough trade mark search could save you money, hassle and even heartache down the line. It also ensures that if there is any later conflict or dispute, you can claim to have adopted your name honestly when such searches have been conducted.
Registering your business name or brand as a trade mark can also be a smart move as it’s the simplest way of ensuring legally enforceable rights for this type of intellectual property. It also protects you from potentially infringing on another’s trade mark rights. Again, you can file an application yourself or enlist assistance from a legal professional who is experienced in the complex world of trade marks.
A last word
Choosing a business name is the first step towards building a strong brand. The process of choosing isn’t particularly easy, but if you put time and effort into a thorough, well-considered approach, you’re bound to come up with something great.
Jacqui is a registered trade marks attorney and has owned her own business, Mark My Words Trademark Services since 2011.
After being introduced to the world of trade marks in one of her first jobs post high school, Jacqui discovered she had a deep passion and interest for all things to do with protecting brands and intellectual property. She completed her graduate certificate in Trade Mark Law and Practices as well as a Diploma in Business Management and holds a current registration with the Trans-Tasman IP Attorneys Board.
Her business provides professional, friendly and reliable advice and assistance on all types of complex trade mark registration, infringement and opposition matters in Australia as well as overseas. Jacqui started the business specifically to support SMEs which typically couldn’t afford such a service and over the years, the company has grown in both size and reputation, with a client list that spans businesses of all sizes across a range of industries.
To keep up to date with the latest in the field of trade marks, follow Jacqui and MMW Trademark Services on Facebook at https://www.facebook.com/jacqui.pryor or https://www.facebook.com/MMWTrademarks.
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