The life of a business begins at the moment of conceptualization. At this point, a businessman should already have an abstract concept about what kind of business he or she will run.
Once the company name is set, it is then formally ‘baptized’ by being registered as a business. Usually, the company name is also used as the trade name.
Trade name registration is one of the most important first steps in starting a company and is needed for a successful trade license application. But what, exactly, is a trade name?
What is a Trade Name?
The trade name serves as the company’s identity. It sometimes gets mixed up with trademarks, but the truth is that they aren’t the same. The main difference between a trade name and a trademark is the level of legal protection they provide.
Trade names are often used by small to medium-sized companies owned by a sole proprietor and which appear as a “doing business as” moniker for an entrepreneur. Trademarks, on the other hand, establish brand recognition and prevents others from stealing rights to company logos, symbols, names or slogans.
What Makes a Great Trade Name?
While it may not offer the same extent of legal protection as a trademark does, it is very important to choose a great trade name because it will serve as your business ID in the industry, and help customers and industry influencers remember your company.
When choosing a trade name, you should go for one that is:
1. Unique and Distinctive
A good trade name must absolutely be unique for it to stand out from the crowd, so to speak.It’s no secret that doing business in these days can be quite daunting, especially if you’re entering a very popular and competitive industry.
To help your business succeed, it is important that you carry a company name that hasn’t been used before. Also, choose one that will “stick” to the minds of your customers. Doing this will also help with marketing and promotion.
2. Uncomplicated and Easy to Spell
Odd trade names are indeed unique, but if they are difficult to spell, then you’re headed in the wrong direction. Not only does this make customers quite forgetful of your company name, but also won’t sit well with online searches.
Google can provide suggestions to users searching for your company website, but that can only go so far if your trade name is something very unusual and isn’t based on a keyword commonly linked to your chosen niche.
3. Simple and Easy to Remember
People have a very short attention span so if you’re after the easy recall of your company name, it is best to keep it simple. Company names that are very long or quite complex often get over the target audience’s heads. It may also become quite problematic to promote your company online considering search engines’ growing list of ranking requirements and criteria.
4. Appropriate to the Industry and Reflects Your Company Identity
A great trade name should also reflect the kind of products or services you intend to deliver. This means you should think of a trade name that is totally related to your niche and offers a clear vision of what customers should expect from your company.
For example, if you register a nursery or tutorial center in your community, you can use the terms “child care,” “kindergarten,” or “education center” at the end portion of your company name to indicate the services you offer.
5. Available for Registration
A great trade name is useless if it’s already taken. Make sure to verify items on your list of names with the government agency responsible for business name registration to see if the possible names you want are available for registration.
Trends online are often shifting and changing. Sometimes, it’s quite difficult to predict which direction it is headed so it is best to choose a company name that is timeless.
The perfect example of this is Google. It is safe to say that the company did a good job in choosing a trade name that never gets old considering that the term is also considered a verb and has been added to various international dictionaries.
Stand Out With a Well-Chosen Trade name
A good trade name should reflect your company’s identity while offering a peek at the services or products you offer. Choosing one is easy so long as you know the characteristics of a great company name, and the direction that you want your company to follow.
Raj Herry is the Founder and Chairman of Flying Colour Business Setup Services. His extensive experience comes from more than 15 years in the field of company incorporation for Dubai Mainland, all Free Zones across the UAE and offshore companies worldwide. He also owns several business centres offering furnished and ready-to-move offices in Dubai.