Why choosing a good business name is important

Think about the companies you purchase from regularly: Countdown, New World, PlaceMakers, Mitre 10, Bunnings, Carters. Have you ever stopped to think that their business name may be responsible for their success? Their names are all short and relatively easy to say.

To your customers, your name helps differentiate you from thousands of builders in the industry. Your name is their first impression of your business. Giving it extra thought now may make all the difference as your company grows.

While your business name is important, what matters most is the brand you create around that name. Additionally, a business name is not set in stone and can be changed. A recent example of this is Vodafone, which is now changing to one.nz. Their name change will be an interesting journey to watch.

Coming up with a good company name

The name should sound good when you say it aloud. I’m a big fan of keeping names short: make sure it isn’t a ‘she sells seashells on the seashore’ situation.

When you come up with a possible name, you should search on Google to make sure there is nothing bad associated with it. Also, run it past a few friends – they may notice something wrong with it that you don’t.

You might want to keep it simple and name the business after yourself. There are pros and cons to this. If your name is not a common one, a business brand name may be easier to spell and pronounce. If your name is common, a business brand may be more distinctive. A business brand is not named after one person; nor does it reflect one person’s values, ideas, and opinions. Business brands create the impression that more than one person is running or working for a business. That said, there are plenty of examples of leading brands that use the name of their founder, or founders, as their business name: Michael Hill Jeweller, John Deere, and Harley-Davidson spring to mind. But until you’re famous it can come across that you’re a one-man-band business.

Do you also need to think about what happens if you sell your business? Research does show that the value of a brand is impacted by what you call it, and data from Harvard Business Review states that you tend to get more money for a company if it isn’t using your own name.

Five mistakes to avoid when coming up with a name:

1. You failed to do a trademark search

Designing a logo and building a brand is an investment. It costs lots of money. One of the worst things that can happen is that you spend time and money promoting a certain name, only to find out someone else has been using it. Even if you haven’t registered a trademark, it will be a tough fight between lawyers to establish who has the right to the name if they were using it first. You may be forced to rebrand and change. Trademarking your logo isn’t too expensive. You can do it yourself online. Always check on https://www.iponz.govt.nz/about-ip/trade-marks/search/

Viewers of your Facebook or Instagram pages will be more likely to view your business favourably if they see you responding to comments and reviews.

2. Your name is too generic A common error I see is being too generic. How many companies do you know that are ABC Services or XYZ Technologies? Being too generic will cause people to overlook you if you sound like every other company out there.

3. People can’t tell what you do Related to the above is having a name that doesn’t tell your potential clients anything about you. This is a potential problem when using your own name (e.g. John Smith Limited) or having a poorly chosen business brand.

4. Not getting the website domain name to match Don’t underestimate the importance of SEO (search engine optimisation), especially if you don’t have a big marketing budget. Make sure you pick a name that you can register at the Companies Office and that you can have a domain name that matches. Don’t pick a domain name that has ‘hyphens’ (e.g. top-notch-builders.co.nz). Check on https://companies-register.companiesoffice.govt.nz/ to see if a company name is taken. Check domain availability through domain name websites such as www.1stdomains.co.nz Only go ahead when you can secure both!

5. Not getting feedback Don’t be afraid to ask for outside opinions when you are coming up with a company name. Ask your clients, peers, and suppliers what they think. Make sure that you find a name that resonates with those you are trying to target. It can be fun thinking about a name for your company but don’t forget it’s important to take it seriously and do it right.

Karla Farrar, General Manager – Marketing and Services, NZCB. With 20+ years’ experience in marketing and communications, Karla has a breadth of knowledge across large and small New Zealand organisations, including owning and managing her own boutique advertising and communication agency. She specialises in acquisition, digital development, branding, communications and marketing.

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