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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:

A great article reg. identification of companies name, as discussed above that companies name plays a major role in bringing business & luring its customer too. But before applying for company name a trademark search by using the Trademark Electronic Search System (TESS) is very important to run a hassle free business, if a wrong name is by mistakenly chosen, then it would not only damage its reputation but overall public appeal too. To run a business better with definite business plan, kindly visit us on This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
The steps are helpful for choosing a business name. Specially the third step is the best for picking a business name because the unique business name is marketable and protects legally. Nice information. Thanks for sharing!
I think that names are especially important online. If you pick a bad one that sounds like it is not legit no one will want to purchase your service from you. It can end you before you begin.
A company is identified by his name and that is it plays the most important in grasping the customer from the market as name t, some amusing names give the he easily rest on their mind make them to remember it and move towards you thus expanding your business. If a bad name is selected for the company it really damages its reputation thus declining the sales and power of it to appeal among commons.
As usual, great article and resources. Thank you, This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
Picking the wrong type of business name can automatically label your company as a high risk. And pick a safe name that won’t that. I just know this, thanks very much!

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