What is a business name?
Firstly, let’s clarify what a business name is. Your business name is a little different from your legal name. Basically, your business name is the name under which you conduct a business. In Australia, you must register your business name with the Australian Securities and Investments Commission (ASIC). However, if you decide to use your personal name as your business name, you do not need to register it with ASIC. Your legal name can be different from your business name or the same.
For example, a sole trader’s personal name is John Smith, his legal name is John Smith and his business name is also John Smith. He does not need to register his business name. However, if he chooses to call his business Aim High Career Counselling, he needs to register the name.
While you won’t need to register your business name if it is the same as your own name, the disadvantage is that it won’t tell potential customers anything about your business, and it could create issues if you decide to sell your business or expand.
Proprietary limited companies are required to have the abbreviated legal terms ‘pty’ and/or ‘ltd’ in their legal name. For example, if John Smith grows his business and decides to establish a proprietary limited company, the legal name might be John Smith Career Counselling Pty Ltd and the business name might be Aim High Career Counselling.
It’s important to note that other businesses can still use your business name, even if you register it. However, registering your business name as a trademark means that others won’t be able to use it.
6 tips for naming your business
Once you choose a name for your business, the only way to change it is to register a new name. So, it’s a big decision. But don’t worry, here are six tips to help guide you through the process.
1. Choose a name that is easy for people to say, spell and recall
A complicated, impressive-sounding name might make you stand out and attract attention, but it will probably also be a challenge for your customers to remember and spell when they try to search for you on Google. This could lead to missed opportunities for you. It would also cause difficulties for your staff answering the phone. So, why not make everyone’s job easier and choose a name that people can easily say, spell and remember. It’s a good idea to say the names aloud when you are brainstorming them, so you can make sure they are easy to say.
2. Make sure that your name can grow with your business
If you have big plans for the future of your business, it’s a good idea to choose a business name that allows you to scale your business. As your business grows, you need a name that reflects your business today as well as tomorrow. For example, let’s say your shop specialises in making delicious cookies and cakes, so you decide to call it Divine Cookies and Cakes. If you decide to expand into other baked goods or types of food down the track, your name won’t be illustrative of what your business does.
Similarly, it’s wise to avoid naming your business after your current location if you plan to expand to other locations in the future. For example, if you run a removalist service in Melbourne, calling your business Melbourne Removals could cause issues if you decide to expand into other capital cities or regional centres.
3. Pick a name that is unique
It’s important that your business name is not too similar to your competitors. Not only will it make your business seem unoriginal and generic, which is not great for your brand image, but customers might also confuse your business with other businesses in your industry. This could potentially hinder your chances of getting repeat work. It’s a good idea to do your research to ensure there is enough of a distinction between you and your competitors. Social media platforms could be a good place to start your research.
When brainstorming a unique name, think about what sets your business apart from your competitors, as well as what your business offers. As an example, the technology company Xerox was able to create a unique name by abbreviating the word xerography – a type of photocopying technique – and adding an ‘x’ on the end.
4. Avoid acronyms
For a well-established company, abbreviating their business name to an acronym might work well for them. KFC (Kentucky Fried Chicken) is a classic example. However, it’s not advisable when you are just starting your business and trying to establish your brand. It could potentially confuse customers and be less easy to remember. It could also negatively impact your search engine ranking because it is highly likely that your acronym will match with that of another business.
5. Consider getting expert advice
If you are struggling to come up with a name, and your budget allows for it, you might want to consider enlisting some professional assistance. Engaging a large branding agency could easily cost you tens of thousands of dollars; however, coming up with a business name for you would usually be part of a package that includes a logo design and general branding. A more budget-friendly option is to enlist the services of a smaller agency or contractor. If you choose to do so, just make sure you get some references for their work from other small businesses.
6. Get feedback
Once you’ve shortlisted a few of your favourite names, it’s a good idea to test them out and see what other people think. Asking friends and family is a great place to start. Or, for potentially less biased feedback, you might consider asking customers themselves. You could create a short survey and ask passers-by on the street or put a call-out on your social media platforms.
Next steps
So, you’ve selected a winning name for your business. What now? Here are the steps that you can follow to make your business name official.
1. Check that the name is available
The first step is to check that the name isn’t already taken. Provided that a business name is not registered as a trademark, multiple businesses can use the name. However, choosing a name that is different from your competitors will help your business stand out and prevent confusion among customers. You can use the Australian Government’s business name check tool to see if your proposed business name is available.
At this point, if you’re planning on having an online presence, it’s also a good idea to check the availability of a domain name that closely matches your business name. If it isn’t available, you may be able to buy the domain name from the owner or add a different extension, such as .shop or .online. Also, bear in mind that you don’t need to have a website to purchase a domain name. You can purchase the domain name before you start building your website.
2. Register your business name
Before you can register your business name, you will need an Australian Business Number (ABN). Applying for an ABN is a separate process. However, it is fairly straightforward and should only take around 10 minutes. You can use the government’s Business Registration Service to apply for your ABN as well as register your business name. This is also where you can register for Goods and Services Tax (GST), Pay as You Go (PAYG) withholding and various other business taxes.
3. Apply for a trademark
Trademarking your business name means that no one else can use it. You can trademark your logo and a slogan as well, if you have one. This gives you legal security and protects you from copycat businesses, which may try to piggyback on your success by imitating your business name or branding.
