14 Aug Considerations in Changing your Business Name
Selecting a name is one of the biggest challenges when starting a business. A good business name builds your brand, identifies your business and what unique value you bring to the marketplace, and differentiates you from the competition. Your name tells a customer about your brand’s personality and your story. You need a name that will evolve with you as you grow your business and expand your offerings, but also a name that isn’t so vague so as to leave customers confused about what you’re selling. While some people name their businesses in a flash of inspiration, most people struggle to find the perfect name that will meet all these needs and catch on like wildfire.
Once you’ve named your business, you build and establish a following and a reputation based on the story of your brand, your products and how well you serve your customers. Ultimately you are spending time building your brand equity. You want your customers to view you as a subject matter expert on your industry and the products you’re selling. You hope they will come to rely on you as a trusted source and associate your name with positive feelings.
But what if your business name isn’t doing these things for you? While a name change shouldn’t be undertaken without quite a bit of consideration, there are always the stories of famous businesses that probably wouldn’t have achieved success under their former names. But before you change your name, realize that you risk damaging the brand equity that you have already built. Changing your name means undertaking quite a bit of time, effort and financial outlay to successfully rebrand your business, while also bringing along your current customers and followers. At this point, you also need to be sure that you’re not just putting a new name on something that is still broken. Now is the time to deal with problems in your business; fixing those problems will help your rebranding be a bigger success.
There are a few situations, however, in which you really should consider changing your business name. We discuss each below:
>Trademark/Copyright Issues – You need to pick a name that’s uniquely yours and you should do your research up front when you are considering names for your business. You don’t want to step afoul of the law or end up getting cease and desist letters from other businesses who own trademarks or copyrights that your business infringes upon. If there is another player in the marketplace with your name or a similar name, you may need to think seriously about changing yours.
>Changing and Evolving Business Offerings – Your business may have evolved over time and changed enough that your business name no longer accurately tells customers what value you offer them. For example, consider the case of Baskets of Yarn, a retail yarn shop in launched in North Carolina several years ago. Over the next few years, the owner expanded the store’s focus to include the fabric and embroidery sectors and wanted a new name and logo that resonated more strongly with these new areas, while still catering to the yarn sector. Thus, Stash was born.
>Confusion/Lack of Name Recognition – Sometimes you pick a name that you think is perfect, but it turns out to be confusing, hard to spell or difficult for customers to remember. If you’re having trouble gaining traction in the marketplace because your name is commonly misspelled or forgotten, it might be time to select a simpler and more memorable name.
>Conflict With Another Business or Brand – Initially, our client Baskets of Yarn thought that “Loft” was a good choice. After seeing logo submissions that looked too much like Ann Taylor Loft, that name was abandoned in favor of “Stash.”
If you have concluded that a name change is in order, you’ve got quite a bit of work to do. Changing your name will require quite a bit of time, strategic effort, and financial resources. Here are just a few of the steps you’ll need to take to complete a name change:
>Strategy – By far, the biggest effort in changing your business name should be spent on strategizing that name change. You need to ensure that your new name does the following:
- Accurately identifies your business
- Aligns with your brand
- Tells the customer what unique value you provide to them
- Differentiates you from your customers
- Tells your brand’s story
Spend time on each of these factors and developing a name that checks all of these boxes. Often, walking through a “customer avatar” exercise can help you nail down exactly who your customer is and helps you become laser-focused on what the brand will be and who you serve. We’ve got a free checklist to get you started. You also need to develop a strategy for how to introduce this new name. This involves the following elements:
>Legal – This is the paperwork portion of the name change, and it’s confusing and can take quite a bit of time. You should consider hiring someone with expertise in starting or renaming businesses to help you navigate this step and ensure that you’re in compliance with all federal, state and local regulations.
>Marketing – Rebranding can cost up to 10-20% of your marketing budget. Are you prepared to do all of the logistics of launching a new brand (new logos, new domain name(s), redesigned website(s), new promotional materials) as well as the work in communicating your new name to the public (advertising and promotion)? How will you build a campaign to leverage the brand equity you built under your previous name to share your new story with your customers and followers? Also, don’t forget all the little expenses: new letterhead, new business cards, new email addresses, and so on.
Considering changing your business name is a huge undertaking and one that shouldn’t be taken lightly. There can be some very good reasons to change your name, but you need to understand the risks to your brand equity when changing your name and have a comprehensive plan and budget for moving forward.
If you’re starting a new business and exploring business names or considering changing your business name and rebranding, Stitchcraft Marketing can help. Contact us today!