Deciding on a Company Name

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So far this has been absolutely the hardest thing I have done for this new business. I spent countless hours over months trying to come up with a name. I’m happy with my final choice but I could have done without the pain of finding it.

Domain Name

Since this is going to at least initially be an online business one of the most important aspects of the company name is can I get the right domain name for the website. In case you don’t know, the domain name is the “google.com”. There can be only one site using “google.com” and it is owned by Google (or maybe their parent company Alphabet). So you can’t use it. You must find your own.

When are you ready to start checking names, find a site where you can see if your name is available. Two sites that I use for checking are GoDaddy.com and Register.com, but there are plenty of others out there in the series of tubes.

State Laws

There are also laws prohibiting you from using the same name as an existing company in the state where you create the business. You might find that your name is unique to your state, but it might exist in another state and then they might have the domain name you want, or something very close to it that would confuse potential customers. Forgetting about the domain name, if both of your companies are national you will no doubt have conflicts. Make sure your name is unique.

When you have a name picked out, check with your state government to see if your name is available. It most likely will be your state’s Secretary of State’s office or web site where this can be found. You should be able to do it online, though likely for a small fee. When you’re ready to formalize your company name you’ll have to do it here anyway so you might as well get to know their site.

Finding a Name

Before you even try to figure out the right name to call your business you are limited to what it can be. Don’t fret. The 26 letters of the English alphabet can still be formed into all kinds of interesting names. You just have to work a bit harder to find the right combination of letters.

Descriptive vs. Implicative

In my mind there were two main types of names: descriptive (like weather.com) or implicative (like amazon.com).

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A descriptive name tells you exactly what you will find on the site. When you go to weather.com you won’t find the latest film releases or stock prices (unless they have branched out and I don’t know about it). You will find the weather. The name tells you what they do.

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An implicative name doesn’t lend itself immediately to what it is, but gives you an overall feeling of what to expect there. With the example of amazon.com, I see dual meaning. There is the obvious “A -> Z” that they make clear in their logo above, meaning that you you will find everything from A to Z on their site. But there is also the word itself, Amazon, which makes you think of the Amazon rainforest. That area, according to Wikipedia, “comprises the largest and most biodiverse tract of tropical rainforest in the world”.  So if you want to find a type of living thing, odds are you’ll find it there. So, like the rainforest, if you are looking for something to buy, odds are you’ll find it at amazon.com.

Get to Know Your Competitors

You absolutely MUST get to know who your competitors are before you start your business. At this point though you need to know them to avoid similar names. Keep a list of them handy as you go through the process to make sure you avoid them or anything like them. Jot down the domain names they use too.

Naming Process

Come up with a process that feels right for you. Try brainstorming names and write them all down. Try descriptive ones first as they would be easiest and move to the implicative names if you want.

When you have some that you think aren’t too bad then first look up possible domain names. The domain name doesn’t have to be exactly the company name but it is good for it to be very close. Keep a record of what is available and what is taken. Put some thought into what suffix you want to use as well (that is what I call the “.com” or .org”, what it really is is the top level domain). When you pick one it is a good idea to go ahead and buy the other top level domains as well to protect your name so others can’t come up with sites with your name and steal your traffic. This means if you pick a domain name of “xyz.com” then you should also buy “xyz.org”, “xyz.net”, etc.

When you have a name and a domain name set then check with your state (the state where you intend to form the business). If it is available then you are good to go! If not, start over.

Final Thoughts

I thought I had a name at least three times before I finally picked the one I have gone with. Just remember to be sure about your name before you open for business. It is a lot easier to change the name before than it is after. After you open if you change your name you lose your name recognition and have to possibly pay for a lot of renaming costs. Be sure before you go live.

Good luck and happy naming!

Forming the Business

Last night I began the process of officially forming my business. Woo hoo! Its about to become real 🙂

Choosing a Name

This can be the most difficult thing you have to do. Really. What is so difficult is that, if you intend to have a website, your domain name has to be available (mybiz.com). I can’t tell you how many names I have thought up that were so amazing, so original, so creative, only to find someone already owned it.

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So you start looking into variations of the names you like, different spellings, cute blending of words, foreign words. You get very familiar with Thesaurus.com since there has to be a similar word to my favorite name that means the same thing but is available. There just has to be…..

I can’t tell you how many iterations I went through trying to find the right name. I thought I found it a couple of times, only to either have it shot down by people I know or to find another site with almost the exact same name that does something similar enough to potentially be a problem.

All I can say is keep trying. Don’t settle. Yes, you can always change it later but the longer you wait the harder that will be. If you do it after you open your doors for business it will be even more difficult because then you introduce rebranding.

Don’t let it cripple you though. Work on it a little here and there. You never know when or where inspiration will appear, and when it does WRITE IT DOWN IMMEDIATELY! Then check to see if the domain exists. I use GoDaddy.com but there are plenty of sites out there from which to choose.

Once you find one you like and is available let it stew in your mind for a day or two. See what others think. When you come to the conclusion that it is good then go get that domain for a year. Don’t commit to more since you still might change your mind, but at least you’ll have it.

Business Structure

The first question I had to ask myself, though I had already decided, was what form should the company take. Should it be a corporation? A sole proprietorship? A partnership? A Limited Liability Company (LLC)? I decided on an LLC and here’s why.

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The owners of an LLC, also called members, have limited liability. This is a big deal. The owners are (mostly) shielded from any personal liability. So if someone goes after your company, they can’t try to get your house too. In Texas it seems that courts have ruled that limited liability can be bypassed if there is fraud or misrepresentation, so I’ll have to avoid any of that (but of course!)

The owners of an LLC are able to choose their own management structure, even manage it all themselves. There is no board of directors, no one else dictating what you need to do or how you need to do it, just the owners. Since I want to make sure that as the business grows I am able to keep a firm grip on it this sounds good to me.

The owners of an LLC are also not required to adhere to any rigid rules as to how the business operates, as do corporations. There are no requirements for holding specific meetings, taking minutes, etc. Though it is a good idea to do these things, as an LLC I will have the flexibility to define it as I choose.

Finally, owners of an LLC can choose how the business is taxed. They can be classified for taxes as a partnership or a corporation. If a partnership, then it all flows through to the owners and is much simpler. If taxed as a corporation, then they get double taxed, where the business gets taxed on profits, then the owners get taxed as well. So its a partnership for me!

Where to Form the Business

So I know what type of business I want. Now where do I create it? I live in Texas so my first thought is form it right here in my home state. But wait, I have heard there are states that are better for this, that have added benefits if you form there. Specifically I have heard that Delaware is the best state. Where should I do this?

If I set the business up anywhere but my home state of Texas, where the primary address of my business will be (specifically my house), I would then have to register my business with the state of Texas as a “foreign entity”. Taxes would then be a more complicated issue (and more costly), and that is one thing I would definitely like to keep simple! So I decided to just form it right here at home. This pic below is Lady Bird Lake in Austin, when I was out on a walk recently. Such a beautiful city!

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How to Form the Business in Texas

So I applied to form the business in Texas (There is a more detailed description of what to do here, though I will take you through a little of it). You can do that here:

Texas Secretary of State

You have to create an account and give them credit card information. The reason for the credit card is that there are fees to do some things on the site, such as searches. And one search you have to do is see if anyone else has your business name already registered with the state. There can be only one! You can do this with the “Name Availability Search” at the top left of the menu. I think it costs $1 to perform the search.

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To apply your new business with the state you need to submit a Certificate of Formation. To get to that, in the image above under “Reservation * Formation * Registration Documents” select the type of business structure you are forming, which for me was “Domestic Limited Liability Company (LLC)” and then press “File Document”.

The next page you see will be what you see below. Select “Certificate of Formation” from the drop down list then “Continue”.

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From here just follow the directions. There is a $300 fee for this, but you won’t have to pay it until you are approved.

Obtaining an Employer Identification Number (EIN)

EIN Assistant Link

The next step was registering with the US Government. This is absolutely necessary to be able to open a bank account for your business, to pay taxes (yes, we have to do that) or to have employees (hopefully, eventually). You can do this online here. But remember, do this after submitting the application to your state and do it during the specific hours that they don’t tell you about until you have completed three or four pages of the application 🙁 If you are doing it after 10 pm Eastern Time then it will kill your application and you’ll have to start over later. It is a painless process though and fairly quick.

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Now what?

This is where I am now. As far as forming the business goes my next steps are opening a bank account, putting money in it (hmmm, need to get some of that), and creating an Operating Agreement. I might get into all that in a later post.

For now though I have to get ready to head out of town. I’m heading to Los Angeles to help celebrate my aunt’s 80th birthday!