You Name It
What are you going to call your business? Has it been obvious from the beginning or does it seem like you'll never settle on exactly the right signature? Now is the time to cast it in print. You may recall, in Chapter 7 on consulting, that we discussed not being too generic, grandiose or cute. Here, in case you're still struggling with this one, are some words of advice from home business gurus Paul and Sarah Edwards:
- Make a long list of words that describe what you want your business to reflect. Think of adjectives, time, place, uses, feelings, features, humorous aspects of what you do, images you have about the business, results you produce and products you offer.
- Piece the words together. Play with them. Consider phonetically pleasing combinations, puns and acronym possibilities.
- Review your creations in terms of what you know about your potential customers. Are they traditional, New Age, alternative? High tech or low brow? Do your customers come to you for expertise or support? Are they at the top, middle or bottom of their field?
"It's this kind of soft information that enables you to come up with a name with some pizazz," the Edwardses say. - Select the best names you've created and list them on a sheet of paper. Play with them in your computer, using different type faces and arrangements of letters. Then ask 25 customers or prospects to look over the list and tell you which company they'd be most inclined to contact and why.
- Make sure your name meets most of the following criteria:
- Easily identifies what you do.
- Stands out from the competition.
- Is readily remembered.
- Is neither too short nor too long.
- Is simple to spell and pronounce.
This process begins with a look through the Yellow Pages in all of your potential markets (see the appendix of resources about on line versions if yours is a wide ranging market). Then get clearance from your state's Secretary of State's office (or other agencies they'll suggest), and check with your county court for records of informal "doing business as (DBA)" activities that may have preceded yours.
You'll know before even checking with these sources whether your name is likely to have had any precursors, past or present. By now you know your competition well. So one good question is whether you even need to register it for $50, or whatever they charge in your state. Probably you do, at least if the name of your company is anything beyond your own name. In my case, it wasn't. I'm in business simply as David A. Lord and haven't found a need to protect that further, given a substantial history at my current address and the specialized nature of my work. But I'm an exception here. Most businesses anything beyond your own name should at least seek state registration to prevent others from creating any confusion in the market (protection is limited in some states).
For a few hundred dollars or more in legal fees, you can go further nationally or internationally. A trademark or patent attorney can advise you of others using a name that's exactly the same, or very similar. If, instead, everything looks good, you can apply for a trademark or service mark registration from the federal government (see the Appendix, Resources) if you intend to market outside your state. While that application is in progress, you can begin marking your brand name (if you want to) with a TM or SM symbol next to it. Later, when it's been approved and registered, you can use a circled.
What Kind of Company Is This?
Speaking of professional help, you'll want to consult your accountant on the kind of structure that best suits your business and personal circumstances. Briefly, your choices include:
Sole Proprietorship
This is the easiest to establish since it requires no documentation. You just pay personal income taxes on all your business's income (after whatever deductions you and your accountant agree on) and pay those taxes on a quarterly estimated basis. That's about it, and it's how many people start. Eventually, you may want to move into another structure as the business grows, for either of two reasons: because in other structures you can gain personal protection against liability for your business's actions (or neglect); or because you want to create something that can outlast your personal involvement.
Partnership
If you're one of two or more principals getting a business going, you'll have to consider this (or incorporation). It's like being a sole proprietor, except that there's an additional partnership agreement that defines the relationship of shared ownership. Liability wise, this is a tough one because all partners are liable for the actions of all others.
A common bit of advice to those entering a partnership agreement is to include a plan for dissolving the partnership if and when it becomes necessary under all imaginable circumstances. The unthinkable is more likely than you think! But before the unthinkable, you can enjoy most of the simplicity of sole proprietorship as a group. You will file tax returns for the partnership even though it will pay no taxes. Instead, you pay personal taxes on the income from your ownership share. Life can get complicated in partnerships, however, even without disagreement. There's great flexibility in determining ownership, allocation and distribution of profits, and capital contributions that affect all of those which also means there's potential for great complexity (red tape and headaches).
