Jeff Edson of Restoration Roofing, formerly Western Systems Inc., in Longmont, Colo., had a dilemma. There was another roofing company nearby with a similar name (Western Roofing) and customers tended to confuse the two, so Jeff decided to enact a name change. He sought my opinion on his marketing strategy for a mailing campaign to inform clients of the name change to Restoration Roofing.



Jeff Edson of Restoration Roofing, formerly Western Systems Inc., in Longmont, Colo., had a dilemma. There was another roofing company nearby with a similar name (Western Roofing) and customers tended to confuse the two, so Jeff decided to enact a name change. He sought my opinion on his marketing strategy for a mailing campaign to inform clients of the name change to Restoration Roofing.

Everything Jeff was doing seemed right on the money to me, I advised. Since some people mixed up his company with another, it was a good idea to get the name changed, and the new one he'd chosen aptly described his business specialty. While he doubted that name confusion cost him any business, having two companies in a marketplace with a similar name can be unsettling. You have control over your company's performance and reputation, but can do nothing about the way others run theirs. Potential exists for bad publicity or liabilities associated with another company to cascade onto yours.

This encounter got me thinking about the broader issue of how to decide on a company name. This is a big decision for startups. While it's possible to change a name later on, it's a hassle to do so. Not only does it cost money in legal and marketing expenses, it can present a significant risk of losing existing customers. So it makes sense to put considerable thought into choosing a name going in.

Too Much Agony

At the same time, it's my opinion that one can agonize too much over what to call a business. Some names certainly are better than others, but in the long run the name of your company is going to have little to do with its success or lack thereof. About 99 percent of that will be determined by how well you operate it. Some names can convey a slight marketing edge or disadvantage, however.

Occasionally, I get my oil changed at a nearby franchise called Duke of Oil. I moved into the community a little over two years ago, and noticed the catchy name while driving by. Would I have noticed it had it been called something more humdrum, like Joe's Oil Change Garage? Probably, given that it's only five minutes from my home, and I pass the location frequently. Nonetheless, let's give them the benefit of the doubt and say that the clever play on the "Duke of Earl" oldies tune gave this business a slight advantage in drawing me to it.

That advantage was worth the price of a single oil change, or about $25 worth of revenue to them. Their convenient location and decent service has brought me back several other times. If I ever have a bad experience with them, I'll write them off forever and get my oil changes at a Jiffy Lube outlet that's about the same distance from where I live, or a Lube Express a few minutes farther away. In other words, the cute name may have given Duke of Oil a slight edge in gaining my attention the first time, but to keep my business every time afterwards, they have to perform to my satisfaction.

Performance over time counts for much more than a clever name. It's hard to think of a more boring business name than General Motors, but that didn't stop them from growing into the world's biggest automobile manufacturer. In fact, if you're wondering how much a name is worth, consider how often famous business names evolve past the point of name recognition into another realm of pure acronyms.

That is, General Motors is now universally recognizable as GM. Kentucky Fried Chicken has become the distinctive KFC brand. How many people even remember IBM's original identity as International Business Machines? Federal Express is now known by almost everyone as FedEx, and so on. None of these companies' names was intrinsically memorable, but they have become world-class brands by virtue of superior performance over time. You know you've really made it when you can dispense with a famous name in favor of mere initials!

General vs. Specific

The corporate parent of this magazine had been known as Business News Publishing Co. ever since it was started in the 1920s. The name nicely described the business it was in, but in recognition of the Internet age and other business activities such as educational conferences, our name was changed a few years ago to BNP Media Co.

This gives rise to another consideration about company names - is it better to be general or specific? Our owners felt that the old identity of Business News Publishing was too narrow in light of the way our business is evolving. On the other hand, going from Western Systems to Restoration Roofing is a move in the opposite direction. They went from a broad description that could encompass almost anything to something quite focused.

Either direction could be the right way to go. It depends on what your business strategy is, and since nobody can tell exactly what the future might bring, no matter what you call it at the beginning, the time may come to change its name along the way. If you think that roofing will always be your business, period, then it would be wise to put "Roofing Co." at the end of your name. However, if you think you'll end up doing a variety of other trade work as well, then "Construction Co." or "Contracting Co." might be a better choice of a business suffix.

Giving the family name to a business is a tradition, and I see nothing wrong with it as an expression of pride in heritage. Seeing one's name on the sign is something that stirs the soul of many entrepreneurs, and it may even contribute a bit to motivating superior performance. For the most part, though, it will have neither positive nor negative effect on a company's fortunes. Again, that will depend almost entirely on how well the business performs over time. Smith Roofing Co. could become one of the pillars of a local business community, or get lost in the shuffle.

There are exceptions to every rule. Some names could be detrimental to a business. If your surname is Leakey, it would assure you of getting calls returned from any paleontologist, but I would advise you not to use it in conjunction with a roofing company. You might want to consider a first name instead - though not if your first name is Rusty!

At the opposite end of the spectrum, it would be senseless for persons bearing a famous name to open a business called anything else. In my hometown of Chicago, restaurants have been named after local sports heroes Michael Jordan, Mike Ditka and Harry Caray. A nationwide chain of popular steakhouses bears the surname of legendary football coach Don Shula.

Being a renowned sports personality does not guarantee success in the business world, however. Michael Jordan's restaurant failed, and Mike Ditka is on his second try in the restaurant business. You can't find more illustrious names than theirs in the Chicago business world, yet even so they have to be up to the task in a brutally competitive field.

An interesting question crosses the mind as to whether someone with the same name of a celebrity could capitalize on it with success. Michael Jordan is a common name, for example, and if your lot in life is to share it, would it be advantageous to do business as Michael Jordan Roofing Co.? I suspect the advantage would be minimal, since almost everyone in the local marketplace would understand that the company has nothing to do with His Airness. There might even be some legal complications.

The real point to be made here is that the name of a business is not nearly as important as some people make it out to be. Sometimes it gets carried to the point of absurdity. Remember back in the 1990s when the parent corporation of United Airlines spent megabucks on consulting fees that resulted in a name change to Allegis Corp., then gazillions more in marketing expense to let the world know about it?

What, you don't remember! No wonder United decided to go back to its original name.

And these days, they sure would like to have back some of those gazillions of dollars spent on that harebrained scheme.