By | Jonathan | SPV Company Mortgages
During the life of a business, a savvy entrepreneur may find themselves in the unenviable situation of being forced to change the name of their business , for various reasons.
It is a difficult process, which requires the filing of the request for amending registration at the registry and the updating of all documents and visuals of the company to adapt the change.
However, sometimes this change becomes necessary.
Companies ranging from Google to Pepsi-Cola went through this process and have become the titans of today.
If they can do it, you can too!
Why change company name?
If changing your business name is a major decision that should not be taken lightly, there are seven key reasons to consider this change:
1. Your current company name cannot be protected by copyright
Lack of copyright controls is detrimental to the future of your business, as it prevents effective branding and can stifle revenue streams from advertising or merchandising.
You could also find yourself in a legal battle in the future if you decide to try to keep your current name.
2. Your current name is difficult to remember
The importance of the fluidity of a business name cannot be underestimated. Blue Ribbon Sports is much more difficult to remember than Nike, for example.
Longer names or those with foreign language expressions are much more likely to be vulnerable to this problem.
3. Your name is too generic
If your name is too generic, it may be time to drop it.
Your brand name should be “catchy” in the minds of your prospects and help you stand out from the competition. However, if your name is too generic, it will be difficult to get the attention of your target audience.
Acronyms are a good example. The problem is that many acronyms make little sense. There are certainly situations where acronyms work – IBM is an example. However, an acronym does not give you a competitive advantage.
Another pitfall is using generic words or phrases to describe your industry or your work – Quality Consulting, Quick Car Wash, etc. If your name simply describes your industry, it doesn’t help your prospects. It is not enough to tell them why they should choose you.
4. Confusion of marks
Does your business sometimes receive calls for a business with a similar name? Do you have problems with people who are constantly mistaken in spelling or pronouncing your brand name?
If so, your business may be suffering from brand confusion. This can be particularly problematic if brand confusion occurs with other companies in your own industry.
If your brand is not sufficiently distinct, it means that your marketing efforts must be even more important to position your brand on the market.
Have you changed your sector, product or strategy?
Companies often rotate to meet new market demand. This may mean that you have introduced a new line of products or services. Or maybe you have even changed industry.
If you change your main products or services or have moved to an entirely new industry, your name can be a barrier to entering a new market. You may want to consider changing your business name – especially if your brand specifically mentions the work you do.
In some cases, a company name is flexible enough to adapt to a new market. Virgin, for example, has worked well for airlines, hotels, finance sector, cellphones and even space travel. But few brands have this level of flexibility.
6. It is closely linked to a place
Many local businesses choose to advertise themselves based on their location, for example “4, Avenue New York”, which only indicates a location.
If you are the only florist, this may be a good solution. But for companies located in larger areas, it doesn’t help you stand out.
And if you want to spread to other places, it can be restrictive.
It can also be problematic if your business name contains a local dialect or refers to an element of local history that would not make sense elsewhere.
If your business has plans to expand, a brand name change might be a good idea.
7. Change of owner
Mergers and acquisitions can obviously have a big effect on the name of your business.
In the event of an acquisition, a company taken over may have its name modified to integrate it into a group for the purposes of branding.
In the event of a merger, the two companies have certain options for naming conventions, ranging from a combined name to a completely new name.
Much of the decision making here comes down to the message you want to send to your customers and those of the merged company.
The combination of names suggests a history and a tradition that are not forgotten, while a brand new name suggests the formation of something new and better than the two building blocks were in themselves.
8. It’s a legacy name that no longer works
Many companies choose to name their company after their founder. However, this can cause problems when the founders or partners leave – or may have died long ago.
Sometimes companies named after people can stand the test of time. Walt Disney, McDonald’s, Morgan Stanley, Johnson & Johnson and Boeing are all famous brands named after their founders.
But if your business does not have this level of recognition or heritage, names based on the founders can be problematic.
Before changing the company name
If you look at the list above, you might think that every company should change its name.
Far from there.
The name change of a company is not without risks or challenges. It is imperative that the benefits far outweigh the costs.
Before you decide to rename your business , you should take the following steps:
1. Have a clear strategy
If you don’t have a clear strategic positioning for your business, start there. A business that does not stand out is an uninspiring and harmless business.
You must clearly express the true motivation of your brand. In other words, you need to clearly understand why you exist and how your business meets the basic needs of your target audience.
2. Allocate appropriate resources
While your name can hurt you, changing your business name takes time and money to get it right.
Don’t fall into the trap of creating a contest or incorporating a few ideas into a name generation tool! Instead, use the right resources to create a company name that will serve as a stepping stone to your brand’s history.
It pays to do it right. A failed name change effort can make you go back even further. Do you remember the days when Netflix renamed Quickster?
3. Fix what’s broken
A change of name cannot save a company in difficulty.
Yes, if your business is involved in a scandal, you may be in a position where the name change would be beneficial.
However, a new name with no change in substance is just a stroke of the sword.
Make sure a new name reflects your identity as a business – not just try to cover up a blunder or repackage the same .
Risks of changing your brand name
Any significant change naturally involves risks. Changing the name of your company therefore exposes it to a certain level of danger, especially if it is located in a small town where brand loyalty and brand history are generally very important.
The brand name change process also has significant costs, potentially a drop in business after the name change, as your customers adjust to your new identity in the region.
Names have power, and brand identity is something that is slow to change in public consciousness, even if your new name is catchy.
If your business needs a change, do it, but don’t expect results overnight! The change you want may take several months or even years to be fully adopted by your customers, but it will be worth it in the long run.
Warning ! If you plan to change the name of your business , it means that you need new branding materials, such as the logo, business cards, brochures, and custom catalogs.
A corporate name change is a delicate process. However, in some cases it is important – if not essential – to make this type of change for a business.
Jonathan is the Founder of SPV Company Mortgages. As a specialist mortgage broker with over 10 years of industry knowledge, he has helped experienced landlords and first-time investors across the country; save tax, time and money by tracking down the best ownership structure and most competitive rates