Choosing the right name for your business is a fundamental component of ensuring that your business enjoys long-term success. Having the right name is incredibly important, both upon initial customer contact and in building a brand that people love and trust. So, let’s delve into the most important things to consider when you’re deciding what to name your business.
Why is choosing your business name so important?
Deciding on the right business name is the starting point from which you are able to build a successful business entity. Having an effective, catchy and distinctive name can, among other things, differentiate your business from your competitors and provide you with a solid foundation upon which you are able to build a powerful brand. However, choosing the right name can be difficult as it needs to meet various legal and industry criteria, be clear and appealing, but also be a name that has the flexibility to grow along with your business.
What are the most important things to consider when naming your business?
Although there are many factors to consider when deciding what to name your business, here are a few of the most important ones.
Branding guidelines
A good name for your company should be short, catchy, easy to understand and able to effectively be used within a branding context. Your name should be distinct and appropriate for the industry in which you operate.
Competitor differentiation
In today’s complex and competitive market, it is important that your name should stand out when compared to your competitors. Having the right name can provide you with a clear competitive advantage and although there are state specific laws around what to name your company, it should go without saying that to stand out from the crowd, your name should be distinctive and memorable.
It is the identity and heart of your brand.
You are able to convey so much about your business from the name you choose. A serious business entity should choose a name that is able to convey to customers the ethos of the business and summarise who they are and what they do. A business that sells cruelty-free, vegan beauty products, for example, would have a name that is in line with the ethos of their company and one that indicates to their potential customers who they are.
Legal requirements
Finally, the legislative requirements for naming your business depend very much on the type of entity that you are registering as well as your state. There are various state regulations that you must comply with, but generally speaking your name should meet all three of these legal requirements; your name must be original, so it cannot be the same as any other existing company, your name must give a definitive indication of the nature of the entity, and your name should be industry appropriate, meaning it cannot be named something that could be deliberately misleading to customers as to the industry you are operating. You therefore cannot, for example, have an LLC operating as a restaurant within the food and beverage industry called “Carl’s Insurance Brokers, Inc.” as this name does not give customers an accurate or clear indication of the nature and industry of the business and it is falsely representing itself as a corporation. Although the above criteria are generally accepted nationwide, there are additional, state specific legal requirements that will vary depending on which jurisdiction you are operating in. In Alaska, for example, you cannot use the words “city,” “borough” or “village” in your business name as this could mislead customers into thinking that the business is a state-run entity, while in Pennsylvania there are over 46 words that are restricted (including “bank”, “assurance” and “homeopathic”) which require additional paperwork when registering so that local government can verify that your chosen business name is appropriate. Most states will allow you to indicate the nature of your company using an abbreviation eg. LLC for Limited Liability Companies, but the particular regulations around these abbreviations vary per state, so it is vital that you research and observe each state’s individual regulations before registering your business.