How to Name a Business

There's a lot of room for personal and professional creativity when choosing a business name, but there are three main considerations to keep in mind:

• Will your business name receive trademark protection?
• Is your proposed business name available?
• If your business will have a website, is a similar domain name available?

Will Your Business Name Receive Trademark Protection?

Trademark law will prevent another business from using a name or logo that is likely to be confused with your business name if your business name is entitled to trademark protection. If your business is anything but a small, local service or retail business, such as a dry cleaners or a fabric store, you'll probably want to take advantage of this.

Why do you want trademark protection?

Allowing businesses to have exclusive use of their names helps consumers identify and recognize goods in the marketplace. For instance, when you buy Racafrax brand of wood glue, you'll know that it will be similar in quality to the Racafrax glue you bought last time. By contrast, if any company were allowed to call their glue "Racafrax Glue," you would never know what you were getting. By allowing just one company to use a name like Racafrax, trademark law helps that company to build customer trust and goodwill.

What business names are trademarked?

Any business name used to market and identify products or services is a trademark. For example, McDonald's uses its business name to market its hamburgers. But to qualify for trademark protection under the trademark laws, your business name should be what trademark law considers distinctive.

Distinctive Names Receive More Trademark Protection

Distinctive business names (such as Xerox, Quicken, and Amazon.com) are clever and memorable, and they usually receive protection under federal and state trademark law. Common or ordinary names (such as Smith's Hardware, Tom's Gourmet Sandwiches, and Pets.com) usually do not.

While there's no magic formula for concocting distinctive business names, they tend to be made up of surprising or fanciful words that often have nothing to do with the underlying business, product, or service, such as Kodak film or Double Rainbow ice cream. However, there can be a downside to coining a brand new word or using a completely arbitrary term. Business names that have nothing to do with the underlying product or service often require extensive and expensive marketing efforts to become established.

The best names for small businesses are those that customers can easily remember and associate with your business. For this reason, many small businesses prefer to use words that cleverly suggest qualities about the underlying product or service without describing them outright, such as Lending Tree for loans, Slenderella for diet food products, or The Body Shop for personal hygiene products. These names are also considered distinctive and are therefore protected as trademarks.

For more information on general trademark law, see Nolo's articles on Trademarks.

Tips for Choosing a Distinctive Business Name

Here are a few more guidelines to use in your search for a distinctive business name:

• Make your name memorable. A creative, distinctive name will not only be entitled to a high level of trademark protection, but it will also stick in the minds of your customers. Forgettable names are those of people (like O'Brien Web Design), those that include geographic terms (like Westside Health Foods), and names that literally describe a product or service (like Appliance Sales and Repair, Inc.). Remember, you want to distinguish yourself from your competitors.
• Your name should be appealing and easy to use. Choose a name that's easy to spell and pronounce, and that is appealing to both eye and ear. Try to pick a catchy name that people will like to repeat. Make sure that any images or associations it evokes will suit your customer base.
• Avoid geographical names. Besides being easy to forget, and difficult to protect under trademark law, a geographical name may no longer fit if your business expands its sales or service area. If you open Berkeley Aquariums & Fish, for instance, will it be a problem if you want to open a second store in San Francisco? Especially if you plan to sell products on the Internet, you should think twice about giving your business a geographic identifier.
• Don't limit expanded product lines. Similarly, don't choose a name that might not be representative of future product or service lines. For instance, if you start a business selling and installing canvas awnings using the name Sturdy Canvas Awnings, your name might be a burden if you decide to also start making other products such as canvas signs or vinyl awnings.
• Get feedback. Before you settle on a name, get some feedback from potential customers, suppliers, and others in your support network. They may come up with a downside to a potential name or suggest an improvement you haven't thought of.

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