Choosing a Business Name
What’s in a name? When you’re talking about naming your new business? A lot! I’ve had many client come to me when starting a business and have the business plan, their products or services all laid out, we talk about funding and corporate structure and the first thing I need to know in order to start the process? The name… It sounds superfluous but it is an important part of a business and you want to take some time and thought before diving in. Here are some tips to get you going in the right direction.
Unique Name
Some business owners want to use a completely unique and made up name. This is very strong from a trademark standpoint on one hand. On the other hand you don’t want to have to constantly explain what your business is or what you do to every person you meet. Choosing a business name is really a balancing game. You need to find a name that will fit all the criteria.
Descriptive Name
With a descriptive name you won’t have the issues of anyone asking what it is that you or your business do. But you must be sure to keep is short, to the point and make it catchy. Having a long business name can hurt you. A long business name can be boring, can lose interest in potential clients, it won’t fit nicely on a business card and the logo would look horrendous. I have had clients with long business names come back to me within 2 years or less to rename the business. This can mean redoing all of your marketing, branding, explaining to current clients and contacts the changed name.
Using Your Own Name
There are pros and cons to using your own name in the name for the business. If it works or not really depends on the type of business you are doing. If you are a lawyer in a solo practice then it may make sense. If you are looking at doing a retail or product based business then another name may be more suitable. You need to have your end game in mind. Many small business owners don’t go into business thinking about retirement, selling the business for a profit or moving and expansion. But it should be considered. First, it’s good business sense to know your end goals for the business and how you will exit when the time comes. But when choosing to name the company after you, what happens when you’re no longer a part of the business? What about if you sell it, or it passes to a family member who eventually takes over?
Using a Location Name
I’ve seen this happen time and again. Someone picks a location name such as using the town that they are located in. But keep in mind that you may not stay in that space for the entire life of your business. You may move to another town for a better location or a better rent or decide to purchase your own building. Even more likely is that you may want to expand your business into other geographic areas and a geographic name won’t work in the second location. You could pick a new name at that point but then you would lose the branding you’ve worked years building up.
Strong Trademarks
The more distinctive the Trademark the easier it is to protect. A made up word for a business name such as Kodak or Exxon are the strongest types of names to trademark. The weakest are descriptive names such as Best Plumbing. A descriptive mark can gain distinctiveness over time such as with the example of Best Buy. These types of names must spend years in the market and take on a secondary meaning in order to have protection. Keep this in mind when choosing your company name.
Trademark Clearance
Whatever name it is that you’ve decided on after countless hours of brooding, you absolutely must be sure that the name is clear for your own use. I practice in the area of trademark law. It is my job to not only help clients clear their business name for use but it is also my job to hunt down and destroy (or notify) those who are using my client’s (or my firm’s) trademark illegally. There’s nothing quite like the feeling of receiving a cease and desist and being told you are infringing on someone else’s intellectual property rights. Don’t let this happen to you. Clear the name first.
Trademark Search
The cost of not doing a comprehensive trademark search can be high. And worst of all, you may not even find out you are stepping on someone else’s toes in using their name until after you’ve spent a lot of time and money building up the name for yourself. It could be years until you receive a “nasty gram” in the mail telling you to Cease and Desist using the company name. The consequences of doing so can be very serious.
A complete federal and common law trademark search is always recommended. This doesn’t mean simply going on to the USPTO website and search for your name. Trademark analyzation is much more complicated than that. In some areas of my practice I let my clients know if they want to save money they can do some of the leg work themselves. But this is not the area to do it. There are many factors of trademark law that must be analyzed in order to clear a name for use. This is one area that is not do-it-yourself.
Trademarking Your Name
I recommend you trademark the company name as soon as you are able to. You will be spending time building up that name, spending money building up the marketing and branding. You should also insure the name that is tied to your business by filing for a trademark.
Please feel free to email or call with any questions.
AMC Legal, P.C. 630-590-3640 info@amclegal.net
This is not legal advice and you should seek the counsel of an attorney.