Ideally, a new business owner will choose the right name for their organization the first time. However, there are cases when a business name change is a smart decision.
Here are some of the pros and cons of changing your business name so you can make the best decision for your enterprise.
Pro: Fresh Start
The primary benefit of changing your business name is to get a fresh start. There are many reasons why you could need an overhaul.
If your original business was co-owned and a partner is no longer involved, renaming the business to suit the new direction and leadership might have merit.
Another reason for this change could be a legal or reputation issue. While a name change won’t preclude customers from investigating your company history, it could add some distance as you try to start over. However, it’s important to be transparent as this change could be construed as an attempt to hide something.
Some business owners discover that the name they’ve chosen has negative connotations after the fact. In this case, changing the business name could help protect the reputation and focal point of the company. Alternatively, they could realize that the name is hard to spell and creates marketing complexities and need something more memorable that resonates with customers.
If you decide your business needs a fresh start, a company name generator is the best way to brainstorm ideas and find an alternative.
Con: Losing Recognition
If you already have a lot of brand recognition, changing the name could lead to confusion and a loss in customer loyalty.
One solution to this issue is to create a rebranding marketing campaign that explains the reason behind the name change and comforts your audience. Be transparent and get your audience excited for the change. Consider having promotions and contests to extend your reach and create positive associations with the change.
This is also an opportunity to assess the consumer perception of your new business name before making significant changes to your marketing collateral and legal framework. Use your audience’s reaction as a guidepost in implementing this change.
Pro: Improved Branding
Businesses evolve over time, changing their offerings and targeting new customer demographics. When that happens, the original business name might become misaligned with the business goals and values.
Changing the business name provides an opportunity to create consistent branding that resonates with the target audience. Brand alignment helps build trust and loyalty by sparking a personal connection. Customers who feel as though a business is talking to them personally are more likely to transact.
When a brand is aligned, it means that all elements of the brand, from its messaging, business name, and promises, to its products, customer experience, and visual identity, are consistent and in line with one another. This creates a unified and cohesive brand image that is easily recognizable and trustworthy to customers.
Con: Costs and Legalities
Changing a business name is a complex and costly process. Beyond the initial legal paperwork, the company will have to invest in changing signage, marketing materials, the logo, the website, and so on.
There may also be additional legal considerations for companies that hold patents or trademarks. It could present an opportunity for contractors or customers to legally break their agreement early. Business owners considering a name change should converse with an experienced attorney before starting the process.
Key Considerations When Changing Your Business Name
When choosing a new business name, prioritize something that’s easy to spell and relevant to the brand. It should be unique and memorable without being difficult to pronounce or spell — especially in the world of online searches.
The name should also be timeless with the intention of having it last a lifetime (and to avoid another costly rebranding session). Consider how scalable the name is. If you have goals of taking your business international, be sure to evaluate how that name could translate in other parts of the world.
Take the time to conduct legal searches and ensure the new name isn’t infringing on any trademarks or copyrights. By considering these factors, you can ensure that the new business name is a good fit for your brand and will help drive its success over time.
