For start-ups, a potential make-or-break decision is what to call your company. A dud name can be a dead weight around your neck, but pick something snappy or memorable and everything else can fall into place. By LUCINDA SCHMIDT.
By Lucinda Schmidt
It’s one of the most important decisions your new business will make: what to call itself. In days gone by, it was pretty straightforward – most businesses were named after their founders.
Nowadays, however, naming experts recommend against using your own name as your corporate identity. For a start, unless you have a cool surname like Crumpler, it’s a bit old-fashioned. Second, if things do go pear-shaped, you may not want the family name dragged through the mud every time the company is mentioned.
And, as a recent court case showed, using your own name can cause problems if you sell your company and want to start another using your own name again.
The case, in which art dealer Chris Deutscher was sued by the new owners of Deutscher-Menzies after he set up another art auction house called Deutscher Hackett, was ultimately decided in Chris Deutscher’s favour. He was allowed to use his name again – but he had to go to court to do it.
So if you’re not going to use your own name, what do you do? How do you come up with a name that is memorable, easy to spell and pronounce and doesn’t mean “sod off” in another language?
Do you go for something descriptive (Toys “R” Us), made up (Kodak) or slightly whacky (Yahoo)?
Naming expert Deepika Stojanovic, from Sydney company NameBrains, says some of the things to consider are what your competitors are called (there may be a good reason why all of them have a certain type of name – or you may want to make sure you are completely different); your position in the market (are you appealing to innovators or to mums and dads in the suburbs?); and what you want your name to do (shock, surprise, sit happily in the background?).
The name has to sound right, but it also has to look right. “How does it look when it’s written down, is it visually difficult to read?” Stojanovic asks.
She says the naming process can be frustrating, because so many names are already taken and because various company stakeholders will probably have different opinions.
“Everyone has their own darling, that they like better than the other suggestions,” Stojanovic says. “But it doesn’t matter what you like, it matters what your target market thinks.”
Remember to think big. In a global economy, it’s not enough to come up with something that sounds great in English. If there’s any chance you may be exporting products or services to non-English speaking countries, you need to think about what your name means there too.
NameBrains charges around $5000 for a quick “instant name” process, which will give you a list of six to eight names that are available. For more detailed work, which might include a full day “naming workshop”, the cost can be as much as $40,000. (Many graphic design and advertising agencies also offer naming as part of what they do.)
Once you’ve thought of your dream name – with or without expert help – there’s another crucial step. Has someone else already got it?
Trademark attorney Richard Neubauer, of Trademark Works, says a good place to start checking is Google. Follow up with checks of the telephone directories, the Australian Business Register, the domain name registers, trademark registrations, company name registrations and business name registrations in your state (for example, www.business.vic.gov.au).
If it is likely that you will be exporting, you may need to extend your checking to some other countries to avoid problems down the track (international trademark databases are listed here).
Assuming your dream name is available, get straight on to registering it. There’s not much point getting company letterhead and signage prepared and a website ready for launch only to find that someone else has beaten you to it.
Neubauer says many people do not understand the difference between business name, company name, domain name and trademark registrations.
His advice is that if you are trading under a name that is not your own name or your company’s name, you must by law register a business name in every state from which the business operates. But registering the name does nothing except identify who the owner of the business is and prevent someone else registering exactly the same name in your state – it doesn’t mean you “own” the name.
Registration of the company name with ASIC is also a legal formality that is required when you operate your business as part of a corporate structure. Registration will prevent anyone around Australia registering exactly the same company or business name – but, again, it doesn’t mean you own the name.
Registration of the domain name gives you the right to that site address on the internet, usually for two years. It’s like hiring an address – you don’t own it. Domain names ending with .com.au must be derived from the business or company name or from a registered trade mark.
The only registration that gives you a property right – allowing you to prevent others using the same or a similar name – is a trademark. “The trademark owner rules, basically,” says Neubauer.
(Technically, you can argue that you are using your company or business name as a trademark, even if it is not officially registered. This is known as a common-law trademark. But from a practical perspective, it is much better to have it registered so others will see it when they search the database and so you don’t have to gather a mountain of evidence to prove that you own the trademark.)
You are more likely to be able to register your company/business name as a trademark if it is inventive (a made-up word), not descriptive (such as Tasty Food), not a geographical name (such as Yarra or Bondi), and not a surname.
Trademark Works charges $500 to register a trademark for 10 years, plus there are government fees of $430. If there’s a good chance you’ll be selling overseas, you might want to register your trademark in a couple of other countries too ($1000 plus government fees).
Neubauer says a popular combination for his clients is an Australian, USA and British trademark registration, which costs about $4500 in total.
So now you’ve got a great name and you’ve registered it as a business name, company name, domain address and trademark. You can relax, right? Wrong.
Neubauer warns that you must be vigilant to ensure that no one else is using your name. Do regular searches such as typing your name into Google, looking up the phone directories, and searching the business and trademark registers.
“If you let someone else use your name for a while, they build up a reputation in that name for themselves,” Neubauer says.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
