Why Choosing Your Company Name is One of the Most Important Strategic Decisions You'll Make
Your company name can support you in your bid to go global – or it can stop you from expanding beyond your region.
Business founders fall into 2 camps.
The first are those who put little thought into picking a company name and quickly settle on a name so they can get back to running the business.
And the second cohort spend weeks (or even months) coming up with different ideas and iterations, researching the potential meaning behind a name they create and testing it on friends and family. They ruminate over every iteration and fret that they will end up making the wrong decision.
While nobody should make a snap decision nor invest months and months in settling on a name, choosing the company name is one of the most important business decisions you will make. You make just not realise that at the start.
These are some of the most common mistakes founders make when choosing what to call their company.
1: Choosing a name that includes their own name.
Really? You’re the single most important thing about this company? You’re offering a commodity product but you think by adding your name to it, you somehow make it special?
In reality, the only thing you are doing by adding your own name is driving all potential customers to want to speak to you directly.
Imagine if you have to speak to every single person or company who comes knocking on your door, and you have to meet with them all because they simply won’t talk to your staff? It would simply be impossible to scale.
But by putting your name over the company door, you are telling potential customers that you, and you alone, are the most important person in this company. And being human, they will feel that they should speak to the most important person.
With only so many hours in the day, you have now cobbled your potential growth.
2: Choosing a name without researching its meaning or connotations in other languages.
A few years ago one of the biggest accounting firms in the world decided to refresh their brand.
Ernst & Young spent months (and a significant amount of money) changing their name to EY. They said this change was made to ‘strengthen and modernise’ their image.
And it certainly got them some additional news coverage – but perhaps not the coverage they were looking for.
It turned out that the multinational professional services company now had the same name as a magazine aimed at gay men in Spain.
The magazine started life as Electric Youth and just like Ernst & Young, they felt the abbreviated version worked better.
Does sharing your name with another company in a completely different industry and country ruin your reputation?
No, but it can cause brand confusion. And some blushes.
3: Choosing a name stating what your company does or sells
Think of all the big company brand names – CocaCola, Apple, 3M, Mercedes Benz, Pfizer etc – none of them state what they do.
You instinctively know because these brands are now known the world over. But if a Martian was dropped on Earth, they would have no concept of whether these companies offer products or services, or in what sector.
The deliberate vagueness of these names means that they can offer products or services outside of their core initial offering.
Take Apple for example – a piece of fruit couldn’t be further away from advanced technology. And nor was the company called ‘Apple Computers’. Because if it was, it would be challenging to later start offering phones, MP3 players and cloud storage.
Steve Jobs and Steve Wozniak didn’t know when they established the company that they would help create and develop all sorts of technology – but they were smart enough not to lock themselves in to one product via their name.
4: Failing to check the direct translation into other languages.
Bad translations can happen even the biggest of companies.
Bing, Microsoft’s search engine, made a major blunder in China. ‘Bing’ translates into ‘disease’ in Chinese – and who is going to want to search on a platform with that name?
Coca-Cola also had a Chinese naming blunder – but they managed a good comeback.
The company didn’t have an official Chinese name and local shop owners created their own versions without giving much thought to how it would be perceived. So one of it’s first Chinese names was a direct translation which meant ‘bite the wax tadpole’.
The company then stepped in to develop an official Chinese name and came up with characters meaning ‘to permit the mouth to be able to rejoice’.
Ultimately this name was well received.
5. Not testing an acronym of your name.
Short and simple is better.
But if you really want a long and complicated name, make sure you test the acronym before you go any further.
Because if you don’t use an acronym, your clients might refer to your business by one.
A name such as Apple Support Services would result in an unfavourable acronym, so be sure that a shortened version is not offensive.