How Choosing the Wrong Business Name Could Be the One More expensive decision of your career

Okay, so you’ve decided to start a business, either by yourself, with a couple of friends, or maybe even a couple of colleagues from your last “corporate gig.” She sits down to her first impromptu “business meeting” with a case of cold coke (insert another favorite drink here) and begins her checklist:

1. Million Dollar Idea: Check

2. Office space (or a spare room/basement in your home): Consult

3. Business Plan: Consult

4. Business name: …

…a blank stare spreads across everyone’s face, and thus your business has hit the first of many hurdles on the road to becoming “The Next Fortune 100 Company.” So you do what every other startup does, you start listing words that describe what you do, try to combine them to create something new, brainstorm and email back and forth for several days, scold each person with whom you come into contact. with to get their input, and FINALLY someone comes up with a name that everyone loves (or more likely, at least everyone can live with) and “The Business” is born.

Now this is where there is a hidden step that probably no one has told you about. Let me explain.

For the purposes of this illustration, let’s assume you choose the name “XYZBiz”. While you’re sure millions of dollars in venture capital, private jets, and an office on the 152nd floor of downtown’s trendiest building are just inches away, there are a couple of things you might not be aware of. both… Important things like: Is there another business called XYZBiz somewhere in the world? Before you file your corporate paperwork, start printing brochures, purchase XYZBiz.com, and build your website, this is a serious question that needs to be answered.

“Why does that matter?” You can ask. Well, there is a large body of laws in the United States, as well as almost every other nation in the world that prevents competitors from using the same name. So if there is another XYZBiz operating somewhere in the good old USA of A. (we’ll leave the rest of the world out of this for now) and if it were to start offering its products and services in the same geographic area (which is a real problem to realize now that the internet has blurred many geographical boundaries), then the other XYZ Biz “imposters” (who are certainly not as good as you) could have a Trademark Infringement Claim against you. And if they had to go after it, it could be very expensive. Because remember, if you get sued, you are REQUIRED to respond no matter how ridiculous it may sound. And, as you may have guessed, at this point you will need to hire a lawyer to handle this situation, and I can tell you that this call is much more expensive than the one I am going to tell you about.

The truth is that this is a very common issue that sometimes goes unnoticed, but many times ends in an expensive visit to the courtroom. So you have two options, you can improvise or you can go the safer route: do a little research yourself and then call an attorney who specializes in trademarks. Now, I know that the mere mention of the word “lawyer” evokes a lot of feelings in all of us, but I can assure you that there are some very helpful lawyers out there… I can think of at least one right now! And the branding process really isn’t that expensive. It’s certainly not as costly as defending yourself against a multi-million dollar corporation or, worse yet, a “sinking ship” company that’s just looking for a way to get some money out of anyone they can.

Trust me…or you can learn the hard way on your own.