Angels Den Blog

One of the most critical decisions you’ll make when starting up a new business is what to name it. While it might seem a rather unimportant or simple thing, in reality it is loaded with importance and can have major ramifications for the success – or lack thereof – of your venture.

If your business ever needs private funding to help it achieve its goals then the name of your business may well play a part in the business Angel’s thought process.

A name that clearly reflects the nature of your business is a popular choice, but some would say that it lacks creativity. Opting for a more unusual, yet ambiguous, name might generate some buzz – or doom your company to obscurity and make you struggle to obtain customers, recognition or even private funding. Here is the debate from both sides:

Argument for choosing an obvious name
Generally speaking, new small businesses are best off selecting an obvious name. If your business name explains what you do then half the battle is already won. An organisation called “Scribbles Writing Services” requires no introduction. You already know that they are a firm of copywriters offering a variety of writing services to meet their clients’ needs. If the same firm had been called “Polygon”, for instance, someone unfamiliar with the firm would be none the wiser for knowing their name.

A simple and clear concept will always be easier to promote and understand; therefore choosing an obvious name for a business could reduce the amount you’ll need to spend on promoting it. Anything that requires explanation or continued exposure to enter the public consciousness takes a lot of money to achieve.

If your business is going to look for private funding at any point then those offering the capital will need to understand with great clarity what your business does. Your business name is the important starting point of this process. Purveyors of private funding agree that first impressions count.

When Google hit the scene in the late 1990s, no one knew what they did based on their name; it was their intensive (and very expensive) marketing campaign that drew the right people – and private funding – in. Because most start-up businesses have small budgets, choosing a clear, unambiguous name is a cost-effective strategy – and it helps make advertising their goods and services far easier.

Argument for choosing a random name
Obvious names are boring – what you really need is a name that will be remembered, one that you can attach the right imagery or corporate identity to so that everyone thinks of your business when they hear it. Look at Orange: what does this name have to do with telecommunications? Nothing at all.

A great example of a company that has been successful with a name that has nothing to do with their business is Monster.com. Launched in 1999 with the merger of The Monster Board and Online Career Centre (notice that they could have gone with this more obvious name but didn’t), they rapidly became the world’s most popular job search websites.

Why did they select such a random, unrelated name? Because it is simple and memorable, and using the marketing techniques that they did they were able to create a strong association between their name and what they offered. In their case, selecting a random name was a strategy that paid off. Had they opted for a longer, more convoluted name, they’d have had a much rougher time standing out among other career-building websites.

Conclusion
When select a name for a new business it is important that it works well within your sector and your budget. Using a name that is memorable is one thing, but you have to have the finances to back this up or the buying public will forget about you very quickly, and without the buying public behind you any chance of achieving private funding could go out of the window.

If the only thing that stands between your business and massive success is a lack of capital, then come to www.angelsden.co.uk where you’ll find Europe’s largest network of private funding specialists waiting for the right opportunity behind which to put their capital.