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Why Your Brand Name Isn’t Your Business Name

After months of planning and preparing, you’re ready to launch your business and start selling your products. But in order to do that, you have to have a name. So first, you need to think about what type of business you’re going to establish and how you’re going to market your products. The practicalities of production are important, but it’s also important that you cover your bases first by making sure you use a business name and a brand name that are free to use.

Hold up, you might be thinking. What’s the difference between a business name and a brand name? Aren’t they the same? Actually, these two names are different from a legal perspective, and from a business perspective, they serve different purposes. As a soon-to-be business owner, you need to make sure you understand the ins and outs of what a business name is and what a brand name is before you start doing business.

Congratulations! You have an idea for a great product, and you’re so confident it will sell that you’re ready to start your own business. You’re certain that there’s a place in the market for your idea to flourish.

If you’re in this situation, then well done! New, innovative products are the best way to meet previously unfulfilled needs and make consumers happy.

However, there’s a lot that needs to be done before a product can hit the market. The first steps involve setting up the business, which means naming it.

There’s a lot of confusion about how naming a business, brand, and products work. To complicate matters,  ad campaign names and special collection names are thrown into the works, too. Because there are endless opportunities for businesses to use different names for different purposes, it’s easy to get lost in the confusion.

What’s In A Business Name?

Don’t let the multitude of name types out there confuse you. You should start by focusing on what type of business you want to form. 

A sole proprietorship is a good default business type for people who want to work on their own. However, it doesn’t provide much in the way of legal protection, and there’s not a lot of room for growth, either. 

If you decide to go the sole proprietorship route, by law your business name has to be your own legal name: for example, Kamala Jones.

The next level, which provides more legal protection, is to register your business in your state as a limited liability corporation, or LLC. If you go this route, then you can choose exactly what your business name will be called. You’re not limited to using your name. For example, you can name your business Unlimited Possibilities, LLC.

Corporations are similar to LLCs. “Incorporating’ your business and becoming a corporation is a great option for larger businesses who want to offer stock options to their employees and who want more complete legal protections, which includes the right to sue. When a business incorporates, it becomes an Inc. So, in our example, the business name would become Unlimited Possibilities, Inc.

You can’t run a business without first having a business name, no matter what legal structure you decide to register your business as. A business name lets government officials, vendors, and business partners know exactly what type of business they’re dealing with. 

A business name can be tied to a brand, but it does more than that by providing protection. 

Sometimes, you might hear business names discussed as trade names. The trade name is the more casual form of the name that the legal business is operating with. It does not require the legal terms – LLC, Inc., Corp, etc., at the end.

A trade name is the same thing as a DBA name. Businesses who use a different name than their legal business name need to make a record that they are “doing business as” that name. A DBA name is the best option for businesses who don’t want to use their technical name when it comes time to market their products.

Brand Names Are Key

To understand how brand names are different from business names, it’s a good idea to look at how it works in the retail world. A great example of a strong brand name can be seen in Nike. Nike, Inc. is the business name of the company, but the brand is Nike. Because the business name is so close to the brand name, Nike does not have to use a trade name/DBA to make the connection clear. But the brand is distinct from the business name: you won’t see Nike, Inc. on the side of a shoe. 

Another great way to understand the difference between a business name and a brand name is to look at the auto industry. Honda Motor Company, Ltd. (the Ltd is because it’s not an American company; in Europe and around the world, Ltd. is used instead of LLC) is the business name. The brand name is Honda, and within Honda there are separate, smaller brands, including Civic, Accord, Pilot, etc. Each of these sub-brands has its own brand identity. 

Apple is another great example: the iPhone, iPad, and Mac are all separate Apple brands. So, one business can have many brands.

It’s important that you protect both your business name and your brand name. When you register your business as a legal structure, whether that’s as an LLC, Inc., or another structure type, you take the first step in protecting your business from lawsuits. 

Brand names also need to be protected. You need to perform a trademark search to make sure that no one else has used this name. Then, once you’ve cleared the name, you need to register it with its own trademark. That way, no one can steal your brand name without consequences.

To Sum It All Up…

Choosing a name for your business and your brand is an exciting process. You get to brainstorm different ideas, discuss them with your business partners, family, and friends, and ultimately land on the choice that you think will be the best representation of your philosophy and your products. 

In the midst of all the excitement, don’t forget about the practical steps of setting up your business. Check the availability of the name, register it with your Secretary of State, use it on all tax forms, set up a bank account with that name, and make sure your website, social media accounts, and brochures all have the right name listed.

Starting your own business is a challenging but rewarding process. Make sure you follow all the necessary steps to protect your company and your dreams!  

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