What to Consider When Changing the Name of Your Business
A lot has happened since you started Elm Street Hardware in 1999. Your post office is constantly sending important mail to Elm Street Pizza and Elm Street Yoga. Even more important for your brand, you're now online and selling your line of vintage decorative hardware worldwide. These are just a couple of the reasons why a business owner may want to rebrand with a name change.
Whether it's because your business model has changed or simply because "Bizzelwensku's Comic Book Emporium" is just impossible to pronounce, a name change calls for careful planning. You'll want to take a couple of caveats into account:
A new name may confuse your customers.
As you know, it takes time for a business to build name recognition and a strong positive reputation. Changing your name can undo much of that great work.
- If you're a local retailer, you'll need to make sure that you're still running the business, and it's not a new owner taking over.
- Any type of business changing its name should create a concerted communications campaign to avoid losing great customers due to temporary confusion.
Rebranding can be expensive and complex.
- A new web domain can cost from as little as $10 to thousands of dollars or more for a particularly in-demand name, depending upon the name you're seeking.
- Depending on your business's industry, size, and structure, expect to spend $5,000 or more on new business license(s), sales and marketing materials, and advertising.
- Consider running a social-media campaign, including email and social media blasts, to announce your new identity. A public-relations or marketing consultant can put it all together, but that adds to your costs.
Still committed to a name change? Here's how to get started.
If you feel that a name-change is in your business's best interests, developing talking points around the reasons can help you make a choice. Think about the goods and/or services your business sells now and wants to sell in the future, as well as what emotions and actions the name should provoke.
A few important steps can avoid some headaches:
- Pick a unique name. Beyond a basic Google search, consult with your industry and local business networks, and even some clients, for their feedback.
- Test the waters. If you're looking to capture new markets, conduct market research, such as focus groups, among those potential new customers.
- Search for your chosen name with your local and/or county and state governments. If it clears, then go ahead and register it with them.
- If you're creating a trademark, add the U.S. Patent and Trademark Office and your state's tradename database to the list.
- Check in with the IRS. Depending on the circumstance, you may need a new employer identification number (EIN). Learn more on the IRS Business Name Change page.
- Revise all licenses or permits your business holds with city, state, federal, or industry entities.
Even if you're just switching to a "doing business as" or DBA to lessen the paperwork, you'll still need to take many of the same steps. Your business structure matters here too—an LLC or a S- or C-corporation may come with different requirements, depending on your location.
When you apply creativity, strategic thinking, and advice from legal, marketing and industry experts, you'll be well equipped to make the right choice for your company's future.
"Make it memorable"...
...is one of U.S. Chamber of Commerce's eight tips for choosing a business name.
Since 2008, Fora Financial has distributed $4 billion to 55,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.
