Choosing a name for your business

The first thing a customer will notice about your business is its name. Creating the right first impression is essential, but not as easy as it looks, as Afsheen Latif finds out

Inspiration for business names can come from almost anywhere. Some names are playful, such as The Cod Father fish and chip shop. Others, such as The Village Bakery, are more functional.

But all effective business names project a strong image that sticks in the mind of customers. Whether you are re-naming a developing business or starting a new one, the name you choose could make a serious difference to your chances of success.

"The wrong name can project an unclear identity about your business, whereas a strong name can accelerate brand awareness," explains David Thorp, director of research at the Chartered Institute of Marketing.

Factors to consider when choosing your business name

Think about your target market, your product or service and the image you want to project. Is it better for your name to be functional or creative? Should it convey personality or reliability? Pick the wrong one and you could be stuck with it for a long time.

"The safest bet is the 'does what it says on the can' approach to business naming," stresses Thorp. "Early Learning Centre and Kentucky Fried Chicken are good examples. A name that has relevance identifies the company clearly - perhaps Habitat, therefore, is a better name than Ikea.

"But whatever style of name you choose, it should differentiate you from competitors," he continues. "Naming your company A1 Cars may get you a listing at the top of the phone book, but customers will struggle to remember if you were AA Cabs or A Star Drivers next time they want to book a taxi."

Pitfalls to avoid

When thinking of names, steer clear of those which are a mouthful when you answer the phone, that would look awkward on stationery, or are tricky to type as a web address. Avoid anything that could restrict your business development.

"Names that restrict a company to its geographical location can create problems," Thorp explains. "Western Hotels became Western International and finally Westin.

"Using your personal name can be limiting, too, especially in a service industry where clients may feel they are not getting their money's worth when Mr Smith is no longer able to handle their business personally," he adds.

Legal constraints

Before committing to a name, search the National Business Register to check the name you want to use has not been registered or trademarked by another business, and that the website address is available.

You must also avoid using words such as 'National', 'Royal' or 'Chartered' which could bring legal action. If you are a sole trader or partnership, you cannot include the words 'limited', 'Ltd' or 'plc', but you are allowed to register the same name as another business - providing it does not trade near you or is nationally known.

"While a Mr Harrod might fancy opening a shop called Harrods, it probably wouldn't be a good idea," Thorp concludes.  

• Get more details about business name legislation from the Companies House website.

You might also want to read the following articles:

• How to identify and promote your USP
• Branding on a shoestring
• Protect your trade mark