Imagine you're hungry. You see a food truck. You slow down. You're tempted. You check out the sign on the side of the truck. In big, bold letters you see "Norwasion." You're puzzled. What does "Norwasion" mean? Maybe Norwegian/Asian fusion? Or some kind of high-tech food? You have no idea, so what do you do?
You drive on by.
While I made up the name Norwasion, you get the point: When potential customers are unfamiliar with a business, they can glean clues from its name to understand what that business provides. If the words "Barbecue" or "Tacos" or "Seafood" had been in the food truck's business name, you would have immediately known what those entrepreneurs offered -- and could have made a quick decision about whether to stop.
The same premise applies to a broad set of businesses. If you see a business named "ACME Design Studios," you might naturally assume they provide interior design services or graphic design. But if it turns out the business is an architectural firm, many customers will be confused.
As you decide what to call your startup or new small business, ask yourself the following questions:
1. Should the name of my company indicate the type of business?
Restaurants can get away with seemingly obscure names: Nobu is named for its founder, Nobu Matsuhisa. Le Bernardin comes from the French folk song "Les Moines de St. Bernardin" about an order of monks who rejoiced in food and drink.
But a daycare facility called, say, "Caribou" probably cannot get away with an obscure name.
While that might seem obvious, consider how many businesses you see with seemingly made-up names. Certain names might seem cool, trendy or have personal meaning to the founder. (After all, your business is your baby.)
But not if the name gets in the way of attracting customers and building a brand.
2. Will I need to spend money on advertising to help customers associate the company with the products or services I provide?
Take a brand like Verizon. Everyone knows that Verizon is a telecom company providing wireless, broadband, etc. But Verizon has also spent millions of dollars making sure customers automatically associate its name with its products.
Unless you have considerable capital at your disposal, don't choose a name that will require spending some of your advertising dollars helping potential customers connect your business name with what you provide. That money is better spent highlighting the problems you solve, the benefits you offer and the needs you meet.
3. Do I want my business to be a reflection of me?
You are your business, especially during the startup phase: Your skills, experience and reputation matter.
But as your business grows, you become less important. You can't do everything. (You shouldn't want to do everything.) Ultimately, your business becomes bigger than you -- your brand becomes the sum total of your employees, systems and products.
Imagine Bernard Marcus and Arthur Blank had named their store "Bernie and Art's Hardware" instead of what they eventually chose: "The Home Depot."
If you plan for your business to outgrow you, consider calling it something that doesn't include your name.
4. Could my business outgrow its name?
"Boston Wedding Cakes" is a fine name; it clearly states where you're located and what you do. But what if you decide to open a location in New York City? Or you decide to expand your offerings to cupcakes, pastries, etc.?
While you can certainly overcome any implied geographic, product or service limitations in your business's name, why risk it? Too specific of a name might require making a change as your company expands.
5. Is my business name available?
Hundreds of thousands of businesses exist, which means hundreds of thousands of business names are already in use. If another business is using the name you wish to use, take a step back and consider the ramifications.The possibility does exist for another company to at least threaten legal action. And it could be a lot harder to get the web address you want.
Since your goal as a business is to differentiate yourself from the competition, why not start that process early by ensuring your company's name is different? You may have to return to the drawing board a number of times, but that's okay.
You want your business to last -- so make sure you choose a name that lasts, too.