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Choosing a business name is one of the first big decisions that a small business owner will make. Selecting the right name is an important decision, as your business name will distinguish your company from competitors. Furthermore, an excellent name enables your customers to better identify your company and its value to them. This article will take you through some of the issues around business names and sets out five tips to help you make the right choice.

What Is a Business Name?

A business name is the name under which your business trades. Unless you decide to trade under your own given name, you will be required to register your business name with the Australian Securities and Investments Commission (ASIC). This is in contrast to a legal name, which can be different to your business name and is usually determined by your business structure. The table below sets out some examples of when you are and are not required to register a business name:

Business Structure

Legal Name

Business Name

Business name registration required?

Sole Trader

Mary Smith

Mary Smith’s Desserts

Yes

Sole Trader

James Johnson

James Johnson

No

Partnership

Robert Smith and Maria Garcia

Robert and Maria’s Shoe Repair

Yes

Partnership

Sarah Brown and Nancy Wilson

Sarah Brown and Nancy Wilson

No

Company

Nails and Beauty Pty Ltd

Vibrant Nails

Yes

Company

Hot Sauces Pty Ltd

Hot Sauces Pty Ltd

No

 

It is important to be aware that registering your business name does not stop other traders from using the same or a similar name. If you want the exclusive use of your business name, you should consider registering it as a trade mark.

1. Choose a Unique Name

Your business name should be distinct enough so that your customers can distinguish your business from other traders. Think about what makes your business unique from competitors and which words reflect the products and services that your business will provide.

For example, while the name ‘Sydney Cleaning Service’ communicates what service the business provides, its customers may see it as too generic and vague.

One way of creating a unique name is to use modified versions of keywords that relate to the products or services that your business provides.

For example, the technology brand ‘Xerox’ is an abbreviation of the word ‘xerography’ (with an x at the end), which is a dry photocopying technique.

You may also consider combining your name and initials with those of any other owners. As an example, the sportswear brand ‘Adidas’ is a combination of the founder’s nickname, ‘Adi’, and the first three letters of his last name, ‘Das’.

2. Choose a Simple Name

While you want your business name to be unique and stand out from your competitors, you also want your customers to remember your name. Avoid choosing a name that is too long or complicated, as customers are likely to forget.

Ideally, your business name should be easy to pronounce and sound familiar to your customers. Your name should also evoke positive feelings in your customers to help appeal to a broader audience. 

3. Choose a Scalable Name

When choosing a name for your small business, you should pick a name that will enable you to expand your business. For example, you might own a shop selling cookies and wish to name your business something associated with this. However, in the future, you might extend to other baked products too. Therefore, making your business name too specific might impede future growth. 

Similarly, if your business is located in a certain area, you might want to extend to other areas in the future. This means you should avoid naming your business after your origin.

Additionally, avoiding naming trends is one way to ensure your business name is scalable. For example, it was popular in the early 2000s to put ‘.com’ after your business name to suggest that your business was an internet business. However, as online businesses became more popular, many businesses were forced to remove the ‘.com’ from their name to adapt.

4. Check if Your Proposed Business Name Is Available

Once you have decided on a potential name for your business, you should ensure that it is not already taken. While a business name can be used by multiple businesses (unless they have registered it as a trade mark), it is in the best interest of your business and brand to choose a name that is not already being used. This will help your business name stand out amongst competitors.

You can check online to see if your proposed business name is available to register.

5. Check if the Domain Name is Available

Similar to tip four, you should check to see if your proposed business name is available to register as a domain name. This is especially crucial if you are planning to have a website, which is essential for modern businesses.

For example, if your proposed business name is ‘Mary Smith’s Desserts’, you may want your domain name to be ‘marysmithsdesserts.com.au’. However, do not feel like you have to give up a good business name if the exact domain name is unavailable. You can always try modifying your domain name slightly and have it still relate to your business (e.g. ‘marysdessertsonline.com.au’).

You can online check to see if your proposed domain name is available to register.

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Key Takeaways

Choosing a name for your business is an important decision, but not something to lose sleep over. Some tips that might make your choice easier include choosing a name that is:

  • unique and will distinguish your business from other traders;
  • simple for your customers to remember easily;
  • scalable;

Additionally, you want to check if your proposed business name and domain name is available. Of course, it is also helpful to share your ideas with your family and friends. For more information on how to choose the right name or business structure for your small business, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What is a business name?

A business name is the name under which your business conducts activity. In most circumstances, you will be required to register your business name with the Australian Securities and Investments Commission (ASIC). 

How do I choose a name for my small business?

When choosing a name for your small business, there are several things you should focus on. This includes choosing a name that is unique, simple enough to remember, scalable and available.

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