9 Mistakes Most Entrepreneurs Make When Choosing a Business Name

by / ⠀Entrepreneurship Finding Customers / December 14, 2021
Getting ready to choose a business name? Read on for nine mistakes nearly every budding entrepreneur makes...and how you can avoid them.

Choosing a business name is one of the most crucial decisions you have to make when starting a new company.

Your business name helps you create your first impression among prospective customers and investors. It’s also a foundation for future branding initiatives, which is why you need to be keen when selecting an appropriate company moniker. Read on for nine mistakes nearly every budding entrepreneur makes when thinking of a business name…and how you can avoid them.

1. Choosing a business name based on location.

While starting your business, you may choose a business name based on the geographical location to improve visibility, and you may benefit from local SEO.

However, you may end up limiting your business to a specific location even as your business expands. If your company is service-based, potential clients may assume that you only offer services to customers within a particular location. This could reduce the chances of expanding your customer base.

Avoid adding or using geographical areas to generate business name ideas to prevent your company from being misunderstood, especially when you aspire to venture into the international market.

2. Basing a business name on trends.

While using a trendy term will attract attention to your business, these phrases may get overused and become dull with time.

A trendy name may also get stereotyped with a particular group of people, which could negatively affect your business. Catchy phrases are also seasonal, meaning there will be a new trending term every time. You should ensure that you should focus on choosing a business name that will remain relevant over the years.

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3. Choosing your name.

Selecting a unique business name can be time-consuming and difficult. You may opt to simplify the process by using your own name.

While it may be convenient to build your brand around your name, it can be problematic in the future. If you decide to sell the business in the future, you may not find a buyer who shares the same name! You may even have to invest a lot of cash to change the brand name to attract a buyer.

4. Choosing a business name that is too difficult to spell and pronounce.

Entrepreneurs often want to use a unique and fancy name for their business.

While choosing a unique name is crucial, you should ensure that the name is memorable. If your business name is too difficult to spell or pronounce, you may end up losing customers to the competition. An ideal business name should be short, simple, and easy to spell and pronounce.

5. Failing to conduct a trademark search.

If you successfully find a name suitable for your business, you should conduct a trademark search to ensure that it does not belong to another company. This helps you to avoid lawsuits or pay hefty fines due to infringement.

If you use a name that is already trademarked, you are infringing on another company’s name. When a company trademarks a specific name, they acquire full rights to the address, and they could sue you for stealing their identity. You could end up paying over $100,000 in a legal suit.

A quick search on the federal trademark database could help you establish whether a prospective business name is already registered or not.

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6. Getting too creative.

When choosing a unique business name that helps you stand out from the competition, you may end up being too creative.

This typically results in opting for a name that keeps potential customers guessing about the services or products you offer. You may end up losing prospective clients to the competition. Customers may not devote time to find out what you offer.

Your website may not also rank at the top of search results in the various search engines such as Bing or Google. To avoid losing clients, ensure that you choose a business name that directly or indirectly gives clients a clue about the services and products you offer.

7. Being too descriptive.

Although your business name should give customers a clue about your company’s services and products, you should avoid being too descriptive. An overly descriptive business name limits your chances of expanding.

You may also have to rebrand in the future if your business’s core focus changes, which could cost you money and time. Rebranding also confuses customers, and you may end up losing loyal clients.

When choosing a business name, you should think long-term. If you intend to expand to other niches, you should avoid narrowing your business name to a specific niche.

8. Failing to conduct research when buying an existing business name.

One way some entrepreneurs choose to avoid the hassle of selecting a business name is by buying an existing one.

While purchasing an existing business name can help you save time, it could ruin a company’s reputation. An existing business name, especially for your website, comes with a history since it is not new. If the history is not appealing, especially if the name has featured materials such as spam content or pornography, it could compromise your business’s image, and you may lose existing and potential customers.

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Ensure that you do your due diligence before buying an existing business name to avoid costly mistakes.

9. Purposely misspelling your business name.

Entrepreneurs often want to match their business names to domain identities. This oftentimes results in purposeful misspelling or awkwardly constructing names to achieve this.

You may end up developing a name that sounds like a prescription drug instead of a business. Using letters such as “PH” in place of “F” or “Q” instead of “K” could end up confusing your clients. This is especially troublesome when searching for your name online.

While inventing terms could help you match your business and domain names, you may have to invest thousands of dollars in advertising to convey the meaning of these terms.


Your business name plays a crucial role in how customers view your business. It also helps you stand out from your competition, increasing your client base and sales volume.

Familiarize yourself with the above mistakes and avoid them when thinking of an ideal business name.

About The Author

Kimberly Zhang

Editor in Chief of Under30CEO. I have a passion for helping educate the next generation of leaders.


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