How to pick the best name for your business

By Susan Schreter

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Entrepreneurs often say their young companies are "their babies." They birth them, nurture them, and experience all the business’s heartbreaks and triumphs in deeply personal ways.

It's no wonder then that many entrepreneurs take considerable time crafting business names that best reflect the spirit and creativity of the founder. Today, there is a trend to select names that sound a little playful or oddly memorable: Flixster, Isango, Mzinga, Yardbarker, Tapioca Mobile, and Zivity are a few recent newcomers. Still other entrepreneurs I know take care in matching up prospective names to numerology charts for extra good fortune.

What's the best way for startup entrepreneurs to approach the challenge of finding the perfect business name? Sarah Van Dyck, managing director for Seattle-based Modo Group, and strategic branding adviser to top Fortune 500 consumer and technology companies, recommends keeping it simple.

"A company name, by itself, can't stand for everything that a company represents," she says. "The best approach is to select a name that is memorable, ownable, and can stand out in a specific business category."

Here are some tactical considerations to help startup entrepreneurs weigh their many naming options.

• Choose double-duty names for convenience.   Coca-Cola did it, so did Bose and T-Mobile. Selecting the same business name as the company's primary product or service brand name is easy and maximizes name recognition potential. However, while it's no big deal to change a product name if it tests poorly in the marketplace, it is much more tedious and costly to formally change the company's name on business licenses, share certificates, bank accounts, and contracts.

  Entrepreneurs should be confident in the longevity of their first product or service brand names to select a similar company name.

• Name it after the founder.   An easy option for most startup entrepreneurs is to name the company after its founder. If the company hits it big, the founder joins the ranks of Michael Dell, Henry Ford, Martha Stewart, Charles Schwab, Michael Bloomberg, Robert Mondavi, Oscar Meyer, and snowboard innovator Jake Burton.

  The downside of naming a company after its founder is linking the business too closely with a single individual. This can work against founders of smaller businesses at the time of the company's sale, because buyers will try to negotiate lower prices based on potential customer defection or perceived brand inflexibility. Founders may also be contractually restricted from pursuing business activities within the same industry as their former namesake company.

• Play it safe with generic names.   It's not uncommon for entrepreneurs to talk to me about pursuing two or three separate business ideas all under one company organization. Here, entrepreneurs are wise to select a name that is not closely related to any single business idea. This will give you maximum marketing and business management flexibility.
• Choose illustrative names that convey your purpose.   Today's startup entrepreneurs have to fight hard to create a memorable impression in the minds of targeted customers. One cost-effective strategy is to select a name that creates positive, helpful connections between a market need and the company name. Business names such as Office Depot, Bank of America, The Baby Einstein Company, and KitchenAid provide clear clues about the expected products and services offered by a company. And how do you like the name "Fixya" for a new online tech support company?
• Check for costly trademark registration conflicts.   Before entrepreneurs commit a brand names and company names to business cards or logo production, it's a good idea to check for potential conflicts. Start by testing the prospective name at state government business licensing Web sites. Most state governments offer a free service to test various business names without charge.

  The next step is to visit the U.S. Office of Patents and Trademarks site. The Trademark office offers a free online service called "TESS" that allows entrepreneurs to research trademark registrations. While naming a company is not the same as seeking trademark rights for a product or service, be aware of potential legal challenges to a name—which could have costly consequences for small company. (See this article for more on registering for trademarks.)

• Evaluate potential Web competition.   Successful entrepreneurs do their homework well. Before you choose a name, find out what other domain names exist, if any, that would compete with yours. (When you sign up for Office Live Small Business and register a new domain name, you will find out if the domain name you want is available. See our "Getting started with Office Live Small Business" page and our Help article, "Register a domain name," for details.)

  Also, research the proposed name's "organic" search results. Evaluate the number of potential industry competitors that rank high on search result pages when you enter your prospective business name into search engines. If possible, pick a name that draws the least amount of search competition.

Jeff Bezos, visionary business founder of Amazon.com, once said, "A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well."

I like Bezos' thinking. Naming a business is just the start of every entrepreneur's drive to earn respect and loyalty in the marketplace. Put forth the time and effort to do it right the first time.

About the author   Susan Schreter is a Seattle-area investment banker and venture-funding expert serving startup entrepreneurs and fast-growth company executives. She also teaches business financing and entrepreneurship at business schools, angel forums, and microfinance organizations in the United States and internationally. Write to Susan at susan@takecommand.org.