Tweet

Three important checks every business owner should make before choosing their trading name

Written by: Michael Smyth

Article Overview: Judith nearly choked on her coffee when she saw the ad in the paper. Judith had never had a problem with competition, but the name and logo of this new business looked remarkably like hers. There were differences of course, but she feared her customers would get confused. Her fears were confirmed when one customer complimented her on "her advertising campaign".

Three important checks every business owner should make before choosing their trading name

Why it was no compliment to Judith
After 3 years of trading the business was financially starting to get some traction in the marketplace. Her customer base had grown exponentially in the last year compared to the previous 2 years and Judith could now see the light at the end of the tunnel.
The risk now was that existing customers may mistakenly telephone this new company, looking for her. The unique identity of her brand had been tarnished. That immediately devalued her business.

Her business lost value overnight
When you sell a business a significant part of its assets is its goodwill. Goodwill represents the relationship your business has with its customers. You can't see goodwill like you can see office furniture, but it does have a value. Your brand and identity is the physical representation of that goodwill. That's why businesses go to the expense of trademarking their brand name and logo.
A trademark application gives you exclusive use to that name and design and makes it much easier for you to stop another business using a name or logo which is similar.

Judith didn't have trademark protection
Unfortunately, Judith didn't have trademark protection for her name or logo. That meant she couldn't rely on the trademark infringement procedures to stop the other company in their tracks. Instead, her only remedy was to bring court proceedings for "passing off", which is a claim you can make in the regular courts. However, she was advised that this would be a long and costly process. She didn't have the funds to commit to protracted and expensive litigation.
She couldn't file a trademark application either
Faced with the prospect of expensive litigation, Judith investigated filing her trademark application. That was when the news got worse. Her rival company had already filed their application and had it accepted. Challenging that registration now would involve further expense with no guarantee of success. She had very few options left.
Judith only had one real option
The only option left to Judith was to re-brand her business. That would entail:
1. Design of a new logo and mark.

2. Registration of a new domain name.

3. Throwing away all existing pre-printed marketing material.

4. Getting new business cards, stationery and promotional literature.

The cost wasn't cheap, but was less expensive than litigation. It was almost like starting out all over again, except this time Judith was going to do it properly.

The three steps to take when choosing your trading name
The first thing most businesses do when they choose their trading name is to search the Companies Register to see whether the name they want is available. However that is probably the least important thing to do, since your company name is irrelevant. It is your trading name that matters as far as goodwill is concerned and that can be completely different to your company name.
The second thing most businesses do is check the availability of the domain name they want. This is important since an increasing amount of business is either being transacted online or being driven by an online presence. If you don't have a memorable domain name, you could be missing out on valuable business.

The third step (and one which a lot of businesses forget) is to check the IPONZ Trademark Register. This can be done by going to www.iponz.govt.nz. If there is a similar name already registered in the same class that you want, then think again about your name. If you are considering trading abroad you may also want to check the trademark registries of the other countries in which you envisage you will have a trading presence in the future.

Judith wasn't going to make the same mistake twice
Judith neglected to search the IPONZ Register the first time around. This time she wasn't going to make the same mistake. From her list of 4 possible names she found 1 that checked out under each of the 3 criteria.

Related Articles
  QuickBooks - How To Reprint Checks That Jammed In The Printer
  If You're So Dumb, Why Aren't You Rich? Part II
  Trading Secrets For Great Profits
  Searching the scopes of iPhone application development for stock trading
  Mentoring, An Essential Part Of Forex Success

Article Tags: new business, rival company, trademark, trading name



Related Forum Posts
Picking a corporate lawyer - Hi Everyone, I was just curious to know what's the most important criteria a small business owner should look at when choosing a corporate lawyer? -Cost/hr? -Location? -Reputation/Referral? -Experience? -Personality? How did you pick your lawyer? And what's a fair price to pay per hour? Thanks
need USD 3.3 M to win higher ROI 120% - We based in Beijing intend to raise RMB 22.55 Million (or, USD 3.3 million) to launch coal trading business. The investor will get 45% share stake in this project and enjoy round average 10.5% ROI monthly and 120% ROI annually. The trading coal quantity will be starting from 60,000 metric tons each trading time and three times of trading in each two months are expected. Note: USD 1 =round RMB 6.8 The investment highlights 1. very simple business model ( buying & selling ) 2. immediately implementing contracts once capital input 3. higher ROI, lesser risks, shorter operation time 4. guaranteed safety of the capital 5. potential expanding trading ability
Need USD 3.3 M to win ROI 120% - We based in Beijing intend to raise RMB 22.55 Million (or, USD 3.3 million) to launch coal trading business. The investor will get 45% share stake in this project and enjoy round average 10.5% ROI monthly and 120% ROI annually. The trading coal quantity will be starting from 60,000 metric tons each trading time and three times of trading in each two months are expected. Note: USD 1 =round RMB 6.8 The investment highlights 1. very simple business model ( buying & selling ) 2. immediately implementing contracts once capital input 3. higher ROI, lesser risks, shorter operation time 4. guaranteed safety of the capital 5. potential expanding trading ability
Credit Record - Thank you for sharing the info. It is important to keep an eye on our credit reports and this is especially important for the small business owner and sole proprietors. Chris
When choosing a domain. - Hi there, What factors are important when choosing a new Domain Name? One needs to be creative and selective to get an attractive name. What challenges have you had in choosing a new Domain Name? Which provider proved to be excellent? I am at the starting point to find a good hosting provider. I guess the choices are immense. Kindest Regards Beat Muelller "Unlock People's Potentials!"


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Four Reasons Why Entrepreneurs Should Blog

Are You Fulfilled

WHAT IS MANAGEMENT CONSULTING

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.