5 Rules for Choosing the Right Business Name

Rocky Mountain Cafe sign.
••• Dave McLeod

Choosing a name for your business might be fun when compared to many of the other challenges you'll face as an entrepreneur, but it's deceptively hard to choose a name that can mature with your business and won't confound the kind of goods or services you offer.

When it's time to choose a name for your business idea or an existing business, gather your trusted family, friends, and/or colleagues for a brainstorming session and work through these guidelines.

A Brand Should Be Memorable and Easy to Spell

Your potential customers need to be able to recall the name of your business in order to easily find it when searching online. Choosing a business name such as “Crychalwellyn” is a bad idea. According to researchers T. Clifton Green and Russell Jame, ease of pronunciation has an impact on fluency and decision making. Unique is good but difficult spellings are bad.

Brands Need a Visual Element

What popped into your head when you read “Crychalwellyn”? Most people don't visualize anything when they read this business name, but generally, they “see” mental imagery when reading or listening to language. Incorporating a visual logo into your business name can be a powerful aid to customers’ memory and a fundamental advertising tool.

TIP:

A business name should have a strong visual element. Colors will be an important component of your business logo and promotional materials, as well as your website.

Brands Should Have a Positive Connotation

Most words have both denotative (literal) and connotative (emotional) meaning. A word’s connotation can be positive, neutral, or negative depending on the emotional associations that people generally make.

"Rocky Mountain Cafe" may have a positive connotation for Americans, evoking serene mountain views, clean water, and a healthful atmosphere. "Eat Here" is an explicit call to action, but contains little connotative meaning outside of its directness. "Sludge Town Deli" evokes a very different connotative brand, through the mention and implied filth of the word "sludge."

TIP:

Choose words that have generally positive connotations and are suitable for describing the business or industry you're in.

If you're starting a trucking business, for instance, you don’t want your name to have a weak or negative connotation, such as “Willow Twig Trucking” or “Kitten Transport.” Rather, you want a business name that conveys strength and reliability, such as “Stone Road Trucking” or "Iron Horse Towing." Both these names have a strong visual element, as well as a connotation of fortitude.

Include Information About What Your Business Does

At first, your business' logo can't be as instantly recognizable Nike or McDonald's, nor can the services you provide be known intuitively by your potential customers. Descriptive logos are easier to process and will elicit stronger impressions of authenticity from your audience. A descriptive logo is one that includes visual design elements and clearly communicates the type of product or service you offer. A study of 597 logos revealed that "descriptive logos more favorably impact consumers’ brand perceptions than nondescript ones, and are more likely to improve brand performance."

Choosing a business name that indicates what you're selling is a practical way to define your brand and makes it easier for potential customers to find your business online or in local directories.

TIP:

Start brainstorming with an adjective-noun combo. It isn't hard for customers to determine the basic products or services that are sold by businesses like the Ford Motor Company or The Good Food Store. Try using a free business name generation tool such as Namobot to get your creative juices flowing.

Keep It Fairly Short

A short, easy name is helpful for promotional purposes, as you want customers to be able to remember your business’s name, spell it, and tell other people about it.

You also want a brand name that will serve you well as a web domain. In a research paper written by Karan Girotra and Karl Ulrich, they discovered that shorter domain names yield higher traffic and the use of a numeral in a domain name is associated with an improvement in the website rank of 8.19%.

Registering and Protecting Your Business Name

Create at least two winning business names (three is even better) as your next step is to register the business, and you may find that your first choice has already been taken. You can legally use a variant of an existing business name only when there's a very low chance that potential customers could get the two brands confused, but you may still end up in court proving your case. It's better to choose something unique.

Registering your business is one way of protecting your business name, particularly if your business is incorporated

Sole proprietorships and partnerships are the easiest forms of business ownership to set up, but registering either of these forms of business gives no business name protection. Federal incorporation will give your business name national protection upon registration.

The best name protection is provided by trademarking your business name, which gives you exclusive rights to use the trademarked name nationally, as well as priority in trademarking the name internationally.

Putting It All Together

Make sure to vet your business name against all the requirements listed above. You and your clientele will be saying and reading it for many years to come. Choosing the right business name is worth the extra effort of research, feedback gathering, and personal deliberation.

Article Sources

  1. Journal of Financial Economics. "Company Name Fluency, Investor Recognition, and Firm Value." Accessed Jan. 20, 2020.

  2. Harvard Business Review. "A Study of 597 Logos Shows Which Kind Is Most Effective." Accessed Jan. 20, 2020.

  3. INSEAD, The Business School for the World. "Empirical Evidence for Domain Name Performance." Page 10. Accessed Jan. 20, 2020.