Five out of seven business start-ups in South Africa fail in their first year according to Rob Davies, Minister of Trade and Industry. Globally, one out of two start-ups fails during its first year.
HomeTimes wants you to succeed as an entrepreneur and to live in the home of your dreams. To enable you to do this we have secured the rights to serialise the book, How to Survive and Thrive as an Entrepreneur, by author, business owner and serial entrepreneur, Neville Berkowitz (63), who shares the secrets he has learned over the course of his 40 years as an entrepreneur. Kele Scheepers co-authored the book.
Thanks to Berkowitz’s website, PersonalEmpowerment.co.
6 Choosing a business name
An effective business name is instantly recognisable, rolls off the tongue and provides a succinct description of your offering. You will want to choose a name that will last and that will embody your values and distinguish your business from competitors. The name of your business will have a tremendous impact on how customers and investors view you. In reality, any name can be effective as long as it’s supported by the appropriate marketing strategy.
Some businesses are so concerned about gaining credibility in their field (usually related to financial services or consulting) that they sacrifice an attention-grabbing name for one that is more standardised. As a small business, you will want a name that expresses your brand succinctly. You can also talk to your family, friends and colleagues to brainstorm and come up with a name that reflects your values. Take your time to find a name that suits your business best, and remember that there are no rules dictating how you should name your business.
Here are a few guidelines to help you select the name of your business.
Made-up words and nonsense phrases make it difficult for your customer to remember your name. Acronyms, in particular, will probably mean nothing to most people. You need to have a simple, straightforward identifier for your product or company. If your business name can be easily misspelled, then it is easily missed too. Once in a while, there is a trend for business names to replace an S with a Z, which could be problematic if the name sounds similar to another entity.
2. Keep it short
This is vital because you want customers and clients to be able to remember your business’s name. It also makes it easier to promote your business. You want a name that will fit well on a business card, look good on a sign or an ad, and ideally works well as a domain name as well. If you’ll be creating an online equivalent of your business, a domain with fewer than six letters will probably already be taken either by legitimate companies or online squatters.
Many words have both a denotation (literal meaning) and a connotation (emotional meaning). When choosing your business name, make sure that you choose words that have positive connotations.
Occasionally, business owners will choose a name that has no meaning or will make the name up from scratch (take a look at the likes of Google and Lycos). However, this can be risky – if the company expands into the international market, the owners might discover that the business name has negative or obscene connotations in another language.
4. Get creative
At a time when almost every existing word in English has been trademarked, the optioning of coining a name has become more popular. Coined names can be more meaningful than existing words if you integrate a unique prefix or significant suffix. You could also consider editing the spelling of existing words in order to create your business name.
5. Keep it simple
Avoid using hyphens and other special characters. Try not to use weird spellings unless it’s a strong part of your brand identity. This will also make it easier if you establish an online website since users will be able to type the URL in their browser. This will also ensure longevity if someone decides to buy your business and they want to continue using the business name.
6. Be aware of technicalities
If you pick a name that is too similar to a name that is already registered as a trademark, you could find yourself in hot water when it comes to intellectual property rights or be accused of misleading consumers. You also can’t use a name that is deemed offensive.
7. Avoid generic names
Business names that are too generic can be difficult to register and trademark. Try not to restrict your business name to a term that describes your products and services, since this does not evoke lasting memories.
8. Leave space for growth
Don’t restrict your business name to a geographic location unless you are certain that your business will never grow outside that particular territory. Also keep in mind that you might decide to integrate new products and services into the existing structure – the wrong choice of name could lead to expensive rebranding at a later stage. When people are first starting off, there is a lot of temptation to get to market sooner and start building traction. This could result in business owners selecting a literal, functional business name which will end up pigeonholing the business.
If your business name has a family history or legacy behind it, tell the story! A comforting or familiar name that conjures up pleasant memories will help customers respond to your business on an emotional level. Having a story behind the name also makes it more memorable for customers. Using your family’s surname could give the business a sense of heritage and also bring a feeling of prestige to a business. But don’t do it haphazardly otherwise it could damage the credibility of your business.
10. Give it time
It can take some time for a new name to feel right, and you may need to use the name for a few months before it starts to feel natural. Put your shortlist of names aside for a day or two and then come back to it with a fresh perspective. You may find that you feel differently about a name that you loved before, or your working list may help you develop a new, perfect name when you review it again. You will want to have at least two or three great business names because once you’ve chosen the business name, you will have to register and your first choice may already be taken. If you have a name in mind, you could also test the market to see if customers, investors and co-workers respond well to it. Ask a sample of your target market for feedback – this could also serve as a useful marketing exercise which could result in future sales. Remember that the name of your business will inform what your website will be, the email addresses linked to it, what you put on business cards, the legalities surrounding your business and whether people will take your business seriously.
Next time we’ll cover the registration process