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How to Choose a Business Name That Helps You - Not Hurts You

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How to Choose a Business Name That Helps You - Not Hurts You

By Marco Carbajo, Guest Blogger
Published: July 10, 2013 Updated: July 10, 2013

During the initial stages of starting a business, choosing the right name of your company can be a difficult task to say the least. It may surprise you but even the name of your business can trigger a red flag with some lenders and creditors.

Unfortunately, many business owners don’t take this simple step into consideration, especially when it comes to the business credit building process.

Before you pick a business name, follow these three steps:

Step 1: Conduct a Trademark Search

You may come across a great idea for a business name, but first you should make sure that you won’t be infringing upon a prior user’s trademark.

The first step is to conduct a trademark search by using the Trademark Electronic Search System (TESS).

This search engine allows you to search the database of the United States Patent and Trademark Office. Once you have completed your search and the results uncover no likelihood of confusion, then you will be ready to proceed.

If you fail to follow this step, it can potentially lead to disaster for your business in many ways. Imagine if you had to recall all of your products because of a demand by a prior trademark user. Not only that, but you can end up paying the other party’s attorney fees and monetary damages, which can get very costly.

If you decide to own a federal trademark, your business will have several advantages, such as:

•           Public notice of your claim of ownership of the mark;

•           A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration;

•           The ability to bring an action concerning the mark in federal court;

•           The use of the U.S. registration as a basis to obtain registration in foreign countries;

•           The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods;

•           The right to use the federal registration symbol ® and

•           Listing in the USPTO online databases.

For more trademark information, tools, applications, and documentation visit the U.S. Patent and Trademark Office.

Step 2: Pick a Safe Business Name

One of the common mistakes that can impact your company’s ability in obtaining credit is in the name you choose. Picking the wrong type of business name can automatically label your company as a high risk.

There are certain industries that the business credit reporting agencies classify as risky, so picking a company name in a high risk category can possibly trigger an automatic turndown, higher premium and/or reduced credit limit recommendations for your business.

For example, real estate is considered a very high risk industry, so naming your company John Doe Real Estate Investments would not be the best choice if you plan to apply for financing. Pick a safe name that won’t get your company labeled as a high risk.

Step 3: Pick a Unique Business Name

While the sound and spelling of a business name – as well as the availability of a dotcom – play a key role, don’t let this be the single factor that drives your decision.

What makes a good name for a business from a marketing standpoint is usually the opposite of what makes a good name from a legal standpoint.

Even though you may think that choosing a business name that describes your product in the name is much better for marketing purposes, it does give you less protection from other people using it against you.

It really depends on what makes the best business sense, but this is something you should definitely cover with both your marketing and legal team.

Select a unique business name that is marketable and protects you legally. Before you incorporate, take the time to review these three steps so you can pick a business name that works and benefits you.

About the Author:

Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

Comments:

Great read here! The name of the business is the corner stone for every aspect of your business including what is to be presented on the old "interweb". To be found and increase visibility your business name should describe and reveal how you can help solve a customer/client problem. Great read. Interested in seeing an article on how changing a business name can hurt or improve ones business.
To be honest, I find that this post really oversimplified the process of finding the right name. Your company name and slogan are the most important aspects of your business' marketing and branding efforts. It's easy to say "pick a unique name"...but what does that mean? What does it communicate to your customers? Does it encompass not just what you do, but your future vision? In every industry, the marketplace is more crowded than ever, and businesses need to engage their customers to stand out. That's basically why I started my business - we connect small businesses with copywriters that write their brand messages - from names, to slogans, to blog posts. We also put together a slideshare presentation to help small businesses find the perfect brand name. Check it out here: http://www.copyshoppy.com/en/blog/an-informal-nine-step-guide-to-the-perfect-business-name And feel free to reach out to me with questions!!
Great piece of writing. I know from experience how difficult this process can be and I try to avoid doing it entirely myself. Brainstorming a business name with a group of people is definitely a better way to go than trying it only by yourself. It requires matching something that is catchy, simple and still explaining what the business is about.
Choosing a suitable name for your business can be stressful process. It must embody your company’s distinguish characteristics. I completely agree with Marco’s consideration that a right name can make your business a hot topic of town and a wrong one can doom it to obscurity and failure. Therefore, your business name should convey the expertise, value and uniqueness of the product or service you are offering.
Great points. You obviously need to approach naming a company from a branding/identity/marketing standpoint, but don't forget to think of the copyright and legal ramifications as well. Definitely use caution when naming a business after a product or service. You want to choose a name that will continue to make sense as your company grows, so don't limit yourself right from the start by choosing a name that can't grow with you.
Good point. Thinking about the future before you finalize your business name is important. You can't turn back the clock so do take everything into consideration. Some people say that making a broad name is best so that it will not limit your ability to make money.
Excellent Points discussed! Choosing a unique business name is the most important point as it is through the business name a customer gets a knowledge about the business or company.
great article really helps out small businesses if anyone needs help starting a business please visit www.biz4loans.com
Before starting a business we should always do brainstorming in order to choose a brand/business name for our company/product to avoid any critical issues and barriers in future.
Good tips. If the name is available to use, I like to be on the practical side and use business names that tell consumers what I'm selling. It also helps from an keyword/SEO perspective.

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