Three typical mistakes when naming a new company

Trying to find the right name for a new company or your work as a freelancer can be more annoying than anything else. In theory, it’s just a question of arranging a few letters in a row – in theory. But it's more complicated than that. In this article, we describe some of the pitfalls of choosing a name for a new business that are definitely not known to a wider audience. So in this article, we’d like to describe some of the pitfalls of choosing a name for a new business that are definitely not known to a wider audience.

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Let’s be honest: trying to find the right name for a new company or your work as a freelancer can be more annoying than anything else. In theory, it’s just a question of arranging a few letters in a row – in theory.*

Now, there are enough checklists of all the things your new name should have and should do out there, but people keep on making avoidable mistakes when naming businesses – and I’m not just talking about the classics like using a trademark or finding out that the name has negative connotations in other languages.

So in this article, I’d like to describe some of the pitfalls of choosing a name for a new business that are definitely not known to a wider audience.

Mistake Number One:
Names that are descriptive – or don’t describe at all

Buchstaben im GlasIn many industries, it’s common practice to integrate keywords about a given product or service into the name. Opticians might well include the word “lenses” or “specs” somewhere, while freight hauliers will generally tend to mix geographic language with terms like “shipping” or “cargo”: American Shipping Co., Cargo Logistics, Eastern Cargo, Cargo Express Inc., Transport USA, Supertrans Inc., ...

Which of these names really stands out, though? None, unfortunately. There is almost no difference between them, and they don’t give you any information about what makes the company special: these aren’t really names in the strictest sense of the word, but just descriptions. The problem with these names is that you can’t protect them and use them as trademarks, which in turn means that any number of competitors could decide to call themselves something similar.

What you should take away is that descriptive names are generally not very noticeable, not very unique and, for these reasons, not capable of becoming strong brand names.

Tango – soft drink or dance school?

If a producer of sodas simply described an orange drink and called it “Orange Soda”, there is no way in the world he could prevent somebody else from calling their orange carbonated beverage the same. The British drinks producer Britvic, however, calls their orange soda Tango, and this is a protected trademark. By the same token, though, if somebody opened up a dance school called “Tango”, this would once again be a description and, as such, not defensible as a trademark. If the operator were to name the dance school “Orange Soda”, however, that could be registered – provided, of course, that no-one else had already done likewise.

Branding is crazy, isn’t it? Then again, the underlying principle is pretty easy: don’t call a product or a company by its description alone, because a description for services or items for sale must remain useable for everyone on the market: e.g. all companies must be able to call an apple an “apple” in a mart, but calling a computer company Apple was a shrewd move, however odd it appeared at the time faced with more button-down names like Microsoft, IBM, etc.

Worse than descriptive names

There is something worse than descriptive names, however: names that do not describe anything at all or offer any associations. More often than not, these names are initials of the “ABC Electronics” or “XYZ Fitness” kind, and usually have the aim of including as many of the owners and descriptions of the business activity as possible into one name.

The problem here is that these abbreviations very rarely say anything about the company, do not stick out, and are entirely forgettable. Anyone who really wants to include the first letter(s) of names into a company acronym should at least go for pronounceable ones like “Haribo” (Hans-Riegel-Bonn) or Adidas (Adi Dassler), to name two German classics of the genre.


Mistake Number Two:
Under/overestimating the importance of web addresses

NameRobot's web addres

Nowadays, having your own web address is part of the absolute basics you need to set up a company: and while you often can’t choose the telephone number you get dealt, you can choose every letter of your web address. The best thing about it is that, if it’s catchy, your customers or potential customers will remember it without business cards.

What if the domain has already been taken?

Ideally, you’ll have found a slick company name and then gone and got the web address to match – as long as that address is still free. If it isn’t, then you’ve got a problem. You’ll either have to add something to your domain name, buy the one that’s occupied, or use other top-level endings.

Additions to domain names tend to make them less attractive and less practical. If you want to call your hair salon “A Cut Above”, you might not want to have to add “hairdressing” or “coiffeur” to the name – it would be a pretty long URL. The only advantage you’d have may in terms of SEO (search engine optimisation). But in the meantime Google doesn't automatically rank keyword domains higher than brand domains.

If the domain you want is for sale, you could buy it of course, but then again, when you’re just starting out with your business, there’s plenty of other things you could use that money for: we could be talking hundreds of dollars, or easily into four/five-figure sums for nationally or internationally-relevant names.

The last option you’ll have if you’re really attached to one particular name is to use another top-level domain. Besides .com, you can choose between .net/.org/.info and still come out looking okay; some of the more exotic endings, however, such as .ws or .cc can look somewhat shady and end up putting customers off and should be avoided, while newer endings such as .hotel or .shop will probably need some time to get general acceptance.

Once you’ve looked at all these options, you might start to think about coming up with a different name, and even if you have one that is half-way okay, you still might end up wondering if you really want to use a name that is already out there in so many variants.

Dotcom domains are not everything

Of course, if you’re setting up something big and ambitious, you’ll definitely be gunning for a .com name. Then again, it really is not worth canning a great idea just because somebody’s already grabbed the .com address. Firstly, almost all of the good, internationally-relevant .com addresses are gone anyway and can only be obtained with difficulty. Secondly – and this is the good news – there are lots of companies out there now using the other common endings like .net, and there is a whole wealth of equally accepted country-code domain names available: for Britain, .au for Australia, or .ca for Canada.

So if you’ve got an all-round perfect name, but can’t get the dotcom address, there’s no reason you shouldn’t – and won’t still be able to – use it.

Mistake Number Three: Not future-proofing

Apps - keyword too specific?Lots of freelancers or companies name themselves using vocab that fits the zeitgeist, with current trends or technological developments being especially popular.

The people who secured a domain like a few years back, for example, made a good choice, but are only covering what has now become a part of a much broader palette: recent years have seen netbooks, ultrabooks, and of course tablets onto the market, and there is no way of telling what the situation will be in a few years time. What if there are no notebooks on the market in five years’ time? There are certainly risks involved in staking everything on one technical term or one piece of equipment.

And this isn’t just a problem for people selling products, but also for sellers of services. Anyone setting themselves up as a freelancer should think long and hard about how much they decide to specify their offering in their name and to what extent they can guarantee that they will still be doing exactly that in a few years. If there is any doubt, it is always a better idea to keep the actual name used a little looser or more abstract and communicate details using bylines, slogans, or other company texts.

What an overly-specific name can lead to

Let’s take a look a concrete example. Say somebody called Moe Murray decided to name their computer hardware and internet services store Moe Murray’s Modems back in the 1990s. Mr. Murray was certainly on the right side of trademark law and people knew he sold computer stuff, but what has happened since?

Well, a couple of years later, broadband internet started to become standard and, with it, routers rather than modems.  A new generation of consumers is coming on-stream for whom “modem” means about as much as “fax”. Secondly, if Moe Murray wants to go into partnership with someone – and this person wants their name on the door – then all of the branding material he has, from his leaflets and flyers through to his website is now fit for the trash.

Things will get worse if Murray wants to sell the business or pass it on to someone else: then that name really will have to go and all the investment over the years in that brand will disappear into thin air. A good name will turn into a brand, and a brand can be rebranded on almost every point – from fonts to logos – except the actual name. If it goes, so does the brand.


Choose the right nameNow, none of this is set in stone, and there are different ways of working in each business sector; but overall, the errors outlined above can cause trouble for all new businesses – whether you’re a new retail shop, an advertising agency, or a web shop.

The most important point is to spend a lot of time thinking about your name at the beginning: you’ll want to work using the name for a while, not have to swap horses halfway down the road. And this isn’t just about the name you use for your company or freelance activities, but also for others like product or brand names.

The only way to do it is to produce a range of name suggestions and then check them all specifically for problematic issues: then you take the one that stands up best. And remember: naming your company can and should be fun, so don’t worry – enjoy the process!

* Some of the names used above are registered trademarks and the author has no relation to them whatsoever. All other names were invented by the author, and any likeness to any existing identical or similar names is coincidental and wholly unintentional.

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