Personal Wealth Management

In Naming Your Business, we reviewed eight rules for creating an effective name for your small business.

Excellent advice for aspiring small business owners and entrepreneurs.

Today I want to briefly discuss another important part in naming your business. 

You can choose a simple, straightforward name for your small business. Or you can be very creative. If you follow the eight rules, you should be able to design an effective name.

Avoid Prohibited Names

But if you are not eligible to use the name, you may be wasting time and money.

Different jurisdictions have different laws relating to choosing a business name. Make sure you know what laws are applicable in your location.

Many of the prohibitions are common-sense.

Restrictions on business names often include no: obscenities or offensive words; existing names where confusion may result; misstating your legal entity; pretending to have a connection to government or royalty; using certain industry names.

For example, if I was in the computer industry, setting up Apple Computers might not work. However, Apple Accounting might be fine as it is in a different industry and there should be no confusion to customers (just do not imply that you are part of the Apple empire).

If you run a sole proprietorship, you cannot call yourself Apple Accounting Inc. (or Ltd. or LLP). The Apple “Queen Elizabeth’s Personal” Accounting will not fly. Or if you try and name your business The Bank of Matthew and you are not a registered bank, you will be offside.

There a variety of prohibited names and they may differ between jurisdictions. Check out your local laws prior to naming your business.

Avoid Names Already in Use

Watch out for using the same business name as another firm.

Legally, you may not be eligible to use the same name as an established entity. But there are exceptions.

Often if you are not in direct (or even indirect) competition, business names can be duplicated.

For example, I am sure there are other Wilson Wealth Management firms out there. If someone started a business with the same name in Australia, no problem. If someone tried that in Western Canada, problems.

Geography is a key factor in competition.

If someone started Wilson Plumbing in Saskatchewan, not typically a problem. It is completely different industry. We are not in competition.

Again, you need to check your local laws and business registry regulations.

Even if you can use another’s name, you might not want to for marketing purposes. If something goes wrong with the other firm, it may taint your own reputation.

Do you want to call your business, Enron Energy? Bernie Madoff Wealth Management? Bre-X Resources? Even if you could, you would not.

Do your homework in naming your business. Make sure it is legal and appropriate for your needs.

A Funny Tale

It is not always new entrepreneurs that make mistakes in this area.

Consider this old story.

Once upon a time there were two large banks. We will call one, Swiss Bank Corporation. The other, Union Bank of Switzerland.

Good business names. Unique, described the business, and conveyed to potential clients the high quality service associated with Swiss banking.

One day these two banks decided to merge. What to call the new entity? It was still great marketing to let potential customers know you were a Swiss bank. So let’s keep that in the name.

Now what should we call the uniting of the two largest Swiss banks. How about the United Bank of Switzerland? Excellent name. Hit all eight rules perfectly.

Fast forward a few months. Logo, letterhead, colours, etc., have all been created. The merger is complete and the United Bank of Switzerland is set to launch.

The launch is a great success! Wait, hold on. What’s that?

There already is a United Bank of Switzerland? Oops. And this tiny little bank will not sell the name to the big boys. Double oops.

Logo, letterhead, acronym, et alii, are all designed and paid for. What to do?

How about we scrap the name, United Bank of Switzerland, and just use the acronym, UBS?

Does not mean anything, but we will use it anyway.

That occurred in the late 1990s. When I worked in the Cayman Islands and The Bahamas, we would often get phone calls from people who thought we were UPS. Yes, we deliver, but financial services and not packages.

A second nightmare involved dealing with potential clients. The inevitable question they would ask as to what UBS meant. To spend the initial part of the discussion on this issue took away from dealing with the client’s needs and objectives. Not the best way to do business (not too mention that the actual story did not make UBS look great).

Finally, using UBS (that means nothing) is still a source of confusion for many. For example, UBS advertises on CNN (Cable News Network – see the 8 rules apply again). Even now in stories about UBS, I occasionally hear their announcers call it Union Bank of Switzerland. You would think CNN could get the name of their client correct. But not all the time.

Even the big companies can make mistakes naming their businesses. In the case of UBS, they went from a strong name that linked the bank with Swiss banking excellence to people having no idea what the name means.

And anything that takes away from your business message hurts revenues and image.

If you want to succeed in your business, do not make the same error.