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Before You Choose a Name for Your Small Business

by Rick Hendershot, Small Business Marketing Resource Library

Choosing a name for a new business is one of the more nerve-wracking tasks the new entrepreneur has to address. The name of your business will be with you for a long time, and the name you choose today will have an influence on the future success of your company.

Create a Company Description before you choose a name

On the other hand it is easy to overstate the importance of a company name. In fact it is probably more important to define your company's main product or service -- to create a short description of what your proposed company intends to do before you choose the name. This description is not so much a "mission statement" as an "elevator speech" -- a five or six second description that will serve as an answer to the question: "What does your company do?"

Let's call this your "Company Description". Imagine yourself in an elevator with a stranger. He asks you "What does your company do?" You want to say something that is both accurate and memorable. You want to tell him "what you do", but more importantly you want this description to be striking and memorable. You want your response to be clear and offer answers rather than creating new questions. And you want it to have some promotional value.

Say for instance you are starting a small business that makes custom built golf clubs. In response to the elevator question you should not just say, "We make custom-built golf clubs." This will raise more questions than it answers, and it will not "sell" your business in any way. It does not have any built-in promotional or marketing value. Multiply this chance encounter by the thousands of similar encounters you will have over the years, and you can see how many opportunities to promote your business you will be missing.

Instead, say something like: "We make high quality custom fitted golf clubs for golfers who want something better than the over priced off-the-shelf clubs you get at most golf stores."

You can see how this sort of description has "slogan potential". You can actually spin a slogan or two out of it -- "Clubs for golfers who want something better" or "Don't settle for over priced off-the-shelf clubs." If you are not happy with this sort of aggressive response, then tone it down a bit. But don't purge it of all self-promotion. It is true that people are turned off by pushy sales pitches. On the other hand, they are generally impressed by positive responses that indicate you are confident in your product and willing to stick your neck out to promote its features.

Think of how the questioner might respond to the description above. If they are totally uninterested in golf, they will leave thinking "Oh, I guess these guys make high quality golf products." If they are totally interested in golf you will probably get a response something like, "Oh, so you make clone golf clubs", at which point you can use the opportunity to promote your product: "No, these are not clones. We use top quality components made in the same factories as the name brands. Our components are made by independent designers and manufacturers who cater to golfers who want custom-built, made-to-order clubs. In many cases our components are better than you will find in name brand products -- simply because we can pick and choose from the best products available."

What does this have to do with choosing a company name

Once you have formulated your "Company Description" you are in a perfect position to start thinking about names. Just as the Company Description will likely be the source of a slogan or two, it will also give you some pretty good ideas for names. It will also increase the likelihood that your name will reflect the positive aspects of your service. Once you go through the process of developing a Company Description you will not be happy with a name unless it does justice to the unique character of your product or service. By developing a Company Description you will already have thought about the target market you hope to address, the unique aspects of the products you hope to sell, and the features you hope to emphasize.

So you will probably not be happy with "Acme Custom Golf Clubs", but instead will look for something better. One method is to list the positive aspects of your products or services and choose to focus on one of those. Think of what these might be in the case of our golf club business: greater selection, custom-fitting, lower price, more personal service, better performance, etc.

If you choose one of these specific features -- for instance, lower price -- your choice will tend to set the tone for your company's future direction. So it is important to think this through fairly carefully. If you do not want to be locked into an emphasis on lower price, then it would be best not to reflect this in your company name (e.g., "Cut Rate Golf Clubs"). Instead you would be better to choose a name that emphasizes the one or two aspects of your service that you know will remain your focus over the next few years.

Either way, you will find that creating a Company Description will be a valuable exercise in defining the direction of your company, and will remain more important than your choice of company name.

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Small Business
Business Services
B2B
Business Resources
Services for Business