11 Tips for the Right Company Name + Tool Recommendations - Start Your Own Business Step 7
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| Photo by Campaign Creators on Unsplash |
But of course, the focus is on what goal you are pursuing with your independence and what effect the company name should achieve with potential customers.
Therefore, in this part of my self-employed article series, there are tips, links, tools, and legal information on the right company name.
The Meaning of the Company Name
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| 11 Tips for the Right Company Name |
The company name is a central element when it comes to marketing your products and services, as well as customer acquisition.
Therefore it is important to pay proper attention to the selection of the company name.
In addition to contact with potential customers, the company name also affects suppliers and potential partners.
But of course, the main meaning lies in the effect on your target group (s).
But how do you choose the right company name?
The Right Company Name for Your Business
The term company name is doubled because the company itself is a registered name. But the company name is the common name for it.
The right company name depends on several factors.
First of all, there are some general principles for choosing a company name. These principles are of course not necessarily binding, but they do reflect empirical values and best practice findings so that certain mistakes are not made that may have already been made by others. I devote myself to these general tips in the next section.
In addition, other aspects should be considered when choosing a company name. There are certain legal regulations for naming companies, but available also plays a major role for the self-employed on the Internet.
11 Tips for the Right Company Name
The following 11 tips for the right company name are empirical values and should help to identify and avoid certain risks and problems when choosing the company name at an early stage.
The tips are arranged alphabetically.
#1 Detachable
By this I mean the possibility of using a company name later without the name affix. If you later convert your sole proprietorship into a GmbH, for example, it would be ideal if you could easily continue to use the company name without the name.
#2 Fantasy Names vs Clarity
It is possible to use fantasy names for your own “company”. But one should weigh up whether clear recognizability of the service is not better than a fantasy name that is meaningless for new customers.
#3 Good to Remember
A company name should be easy to remember so that it “burns in” with customers. Pictorial expressions have proven to be more effective than abstract terms.
#4 International
If you want to expand internationally at some point, you should check beforehand whether your company name has any negative meanings in other languages.
#5 Deception
Certain terms are only allowed in the company name with the approval of the registry court. “Bio”, “Öko”, “Institut”, “Akademie” and others. In general, a company name must be unambiguous.
#6 Competitor
Your company name should not be too similar to existing companies. The ability to differentiate is not only legally required, but also makes sense from a marketing point of view.
#7 Long Term
Think long-term. Company names that aim too much at the current situation or pick up on current trends can later become problematic. Companies change, this should be taken into account when choosing a company name.
#8 Effective Without a Slogan
Ideally, one uses an additional slogan to convey further information. However, you should check whether your company name works without the slogan and whether potential customers can relate to it.
#9 Range Expansion
The company “Hutmode Meier” will later have problems with the marketing if it wants to offer clothes etc. in addition. You shouldn't be too restricted by the company name.
#10 Unfavorable Abbreviations
You should also check how the abbreviation of the company name works. The fictional company “Winkler Computer” sounds completely normal. The abbreviation WC just doesn't do that well. :-)
#11 Effect on Customers
The psychological effect should also not be ignored. What do potential customers think of “Elektroservice Pfuscher” or “Funeral Home Lustig”. There are simply company names that do not go together with certain names. You should then consider choosing a legal form that does not require a family name or looking for other solutions.
In general, you should take your time to find the right company name and “play through” many variants in a brainstorming session.
In addition, you should seek other opinions, print out the company name as an example on a header sheet and sleep on it before making a decision.
Beware of Restrictions
From a long-term perspective, you should avoid limiting yourself too much. So you should think carefully about whether you are making geographical restrictions, and you should be particularly careful with restrictions on content.
Back then, I made a conscious decision to use a fantasy name for my business that left all options open to me in terms of content and geography.
Anyone who “only” wants to open a shop and has no further plans can of course make geographical and content-related statements in the company name, which can then also have advantages.
Pitfalls
There are some pitfalls in choosing a company name that should be avoided at all costs.
Competitor
I once had a client who needed a website for his new agency. So far everything went great and together we developed a nice and suitable website. Shortly before completion, the mail came from a competitor or his lawyer.
There was already an agency with that name and now my client had to change his entire corporate image. So not just the company name, but also the business documents, the advertising material and of course the website. The joke was that we had incorporated a large number of allusions to the company name in terms of content. Of course, that didn't work anymore.
So it can be very costly to change the company name afterward. It gets even worse if you've been in the market for a while and have made the company name known. Then you start all over again.
The IHK partially offers a company name search, which is a good first basis. If in doubt, you should speak to a lawyer to avoid problems later.
Trademark Protection
As a self-employed person on the Internet, there is no obligation to register your company name as a trademark. It's not cheap either, but in the long term, it can make sense to be protected from imitators and copycats.
There is certain basic protection for entry in the commercial register. Proper protection, however, is only possible through trademark protection.
Conversely, it is of course also important not to infringe any existing trademark rights.
Misunderstandings
You should check in advance whether a company name can lead to misunderstandings. This can arise from a dialect or in some other way lead to potential customers not only not knowing what the company is offering (which is already not good), but suspecting something wrong.
Here, too, it usually helps if you ask others for their opinion and impression.
Availability
Last but not least, before deciding on the right company name you should check availability, especially on the Internet.
Company Name Availability
As a self-employed person on the Internet, you should check to what extent the company name is still available for domains, social networks, etc. You can do this by hand or you can use a tool for it.
Namecheck.com is a tool that queries various social networks and domain endings. Green means that the selected name is still available for this service.
But of course, this is not legally binding and in case of doubt, you should consult your lawyer. After all, this is about a decision for the future and you shouldn't take long-term risks because of a few euros.
Legal Requirements for the Company Name
We come to another important point when choosing a company name.
There are some legal requirements for company names that result from the choice of the legal form :
- Sole Proprietorships / Small Businesses
Sole proprietorships / small businesses not registered in the commercial register must always have at least one full first name and last name in the company name. In addition, an industry name, job description, or fantasy name can be used. - Freelancer
For freelancers, it looks similar to the above. However, freelancers must make it clear that they are freelancers using a job title that corresponds to a freelance occupation. In other words, information like “tax advisor” or “architect”. - Company in the Commercial Register
Companies that are registered in the commercial register are free to choose their names. You don't have to use your name like this. However, the additional legal form, such as GmbH, must always be included. This also applies to merchants. In the case of property companies, the purpose of the company must be recognizable.
Conclusion on the Right Company Name
The right company name should be carefully considered. He will represent his own company significantly to the outside world and a later change is associated with high costs, high effort, and a loss of awareness.
So It Goes on
The next part of the article series Getting started is about business registration and other necessary bureaucratic channels.
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