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HOW TO CHOOSE YOUR COMPANY NAME?

This is a question that seems simple, but quickly becomes complex when you take into account all its parameters.

Generally, using our own personal name is our first reflex. Ultimately, it is us who are in business and our customers do business with us. However, this option poses some problems (which can be solved if you manage to build a multinational and your name becomes a brand):

- If you decide to sell, it will be impossible for someone else to operate under your name. Moreover, all your traffic can not be transferred because it was generated under your name.

- Another problem: if you offer your name to a potential buyer as part of the assets, you may lose the ability to use your name in a given market. If you are looking to retire and you do not want to work that is not a problem. But if you intend to reposition yourself
-depending on the agreement that you reach with the buyer – you may find yourself severely limited, especially if you work in a very specific niche.

  • - Lastly, when your business grows and you want to hire someone, it will be very difficult to sell someone other than you to your customers. Your name is above the door; your customers want to do business with you.

What would be another option? There is of course the possibility of a very descriptive corporate name, for example: wholesale-jeans inc. And luckily, the domain name is available! The advantage of this alternative is that your name also says what you do. So, while promoting your name you also advertise your operations. The problem comes when you want to diversify your operations. You want to add shirts and jackets to your jeans, and in this case the name is no longer a good fit.

So let’s go in the opposite direction - a completely generic name. Using this solution, you shouldn’t have trouble finding a matching domain name. And if you want to diversify, there’s no problem. You want to sell? Again none of the problems outlined earlier. But be careful with a generic name (Old Navy, for example); you must make the connection between the name and what the company does. The name I have just mentioned is a very strong brand, so the mere mention of Old Navy makes you think of ready-to-wear clothes for the whole family. But huge amounts of money had to be spent to make this connection. So unless you are heir to a fortune or a happy lottery winner, your budget may not stretch this far.

An interesting option is combining a descriptive and a generic name. An example is Delta Air Lines. In the name you have a generic component (Delta) and a very descriptive portion (Air Lines). So by promoting the company name (branding), one also advertises its activities. Obviously, these companies are huge (Old Navy and Delta Air Lines), but you can understand the logic that we are trying to explore. And as the business grows, people will become familiar with both components of the name. So that if Delta Air Lines decided one day to diversify into railroad transport, we could have ‘Delta Railroads’. With the logo added, everyone will immediately make the connection between Delta Air Lines and Delta Railways. The same will happen in your case.  

So if you are at the name choosing stage, consider these parameters before becoming a well-known brand and you will avoid having to do the same work twice.  

Have a great day!

Stéphane Elmaleh-Riel, B.Ed., MBA
Marketing consultant