CFO Q&A - Naming Your Business
Apr 29, 2024When it’s time to name your business, the decision might seem as personal and defining as naming a child. But according to Shannon, choosing to name your business after yourself could be a risky move with long-term consequences. Her advice, grounded in years of financial and business expertise, is clear: avoid using your personal name and instead, opt for something that affords you privacy, safety, and room to grow.
**The Risks of Personal Business Names**
Shannon points out that using your personal name as your business name might seem like the easy route, but it comes with potential pitfalls. Privacy concerns are at the forefront—identifying so closely with your business means anyone can find out who owns the business and delve into your personal details online. This could make you a target for identity theft, and most certainly elevates your risk profile.
**Naming Affects Branding and Legacy**
Drawing an analogy to a personalized license plate, Shannon emphasizes that as your business grows and you delegate responsibilities, those representing your business are driving around with your name on the proverbial bumper. Their missteps could have a direct, negative impact on your reputation. This might not only affect your business but your personal name in the market, making it harder to dissociate from any potential bad reviews or ill-fated business decisions.
**Selling Your Business: Plan for the Future**
Let’s say you’ve built a successful business and you want to sell. If your name is on the door, a buyer might be less inclined to take over something so personalized to someone else. Removing your personality from the equation beforehand can make your business more attractive to potential buyers, ensuring a smoother transitional period and future profitability.
**But What If You’ve Already Named Your Business?**
There is no harm done, Shannon reassures listeners. The solution comes in the form of a "Doing Business As" (DBA) registration. This allows a legal entity to operate under a different name, providing the freedom to rebrand and market under a new banner without losing the historical benefits tied to the original business entity. This is crucial to maintain maturity and history, especially if seeking business financing.
**How to Choose a New Business Name?**
Shannon urges entrepreneurs not to stress over picking the 'perfect' name. It should be unique and clear of any trademark issues, but beyond that, the right name is just a mix of creativity and practicality. An inside joke, a nod to a favorite geographical feature, or a combination of initials can all serve to create a name that stands out and resonates with your business ethos. But remember, make it easy to spell and pronounce—your customers will thank you.
**Take Action and Advice**
If this talk of names and business identity has you mulling over changes or initial choices, Shannon's final call to action is clear: consult with a lawyer or a state expert to ensure your decisions are sound. And if you’ve identified a need for deeper business finance insights, consider booking a power session with her to uncover potential in your financials like never before.
Bearing the weight of these considerations might feel overwhelming, but Shannon's advice provides clarity and a roadmap for action. By strategically naming your business and using legal tools like a DBA, you lay the groundwork for growth, success, and an eventual exit, should that day come. So take that step, name your business thoughtfully, and set sail knowing you've fortified your personal and business identity for the long haul. After all, in the journey of entrepreneurship, keeping what you earn starts with how you introduce your business to the world.
What you'll hear in this episode:
06:13 Avoid risks by not naming business after yourself.
07:10 Unique business names are like Taylor Swift's Easter eggs, personal and flexible.
12:25 Limited spots available for transformative business sessions.
If you like this episode, check out:
Do You Really Need a Business Plan?
3 Reasons to Separate Your Business Money from Personal
Want to learn more so you can earn more?
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Watch this episode and more here: https://www.youtube.com/channel/UCMlIuZsrllp1Uc_MlhriLvQ
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.
