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Businesses move away from family names

It’s not a family affair for small firms

The number of small firms starting out with a family name over the door is in decline, according to research from Royal Mail. 41% of small businesses established before 1980 are named after a family name. That figure falls to only 14% among businesses established after 1995. Just 24% of small businesses (less than 300,000) have a family name today.

Younger companies are more likely to have a factual, product driven or even humorous name today than companies that have been trading longer.

Results of the Royal Mail survey also revealed:

25% of small firms established prior to 1980 said their present company name is reflecting a product or service offering. That figure rises to 50% of small businesses established after 1995. Overall, 41% of small firms have ‘factual’ names
11% of those established before 1980 said their present company name is based on an anagram or play on words, compared with 16% of businesses established after 1995. Those firms account for 13% overall
2% of small firms established before 1980 said their present company name was humorous compared with 6% overall
There are now approximately 200,000 small businesses with ’funny’ names in the UK

Royal Mail’s research revealed that the decline of the family names appears to be linked to modern marketing practices, particularly e-commerce. Small firms see making it immediately obvious what they do as more important than choosing a name that reflects family or local identity:

66% of people asked felt that the company name helps to market the business, and when asked why, 66% of them said this was because it explains what the business does
Just 1% of those who felt their company name helps them market their business said it was because the name was a traditional family name or local name
48% of small firms trading over the internet have names reflecting a service/product offering compared with 37% of those not involved in e-commerce
47% of small businesses with websites have names reflecting their service/product offering compared to 34% of businesses without a website

Tim Rivett, Head of Small Business at Royal Mail, commented: “The name of a business plays an important role in creating the very crucial first impression of the business. Getting it right is therefore key.

“Royal Mail has products to help small businesses create a good first impression with their mail, improving their chances of winning new customers, keeping existing business and – at the same time – saving time and money.

“For example, SmartStamp™ – the online postage system – enables businesses to put their company name, a photo, logo or slogan alongside the postage impression and print it directly off their printer onto a label or envelope. Medium sized and larger businesses, which send out larger volumes of mail, can add that personal touch by printing logos and images on their envelopes using franking machines."

To help small businesses getting the name right, Royal Mail has provided five top tips:

1) Check that the name isn’t already taken: The first thing you should do before applying to set up a company is search the index at Companies House to see whether there already are companies with similar names to the one you had picked out. Check now. It might also be worth checking the phone book and reading trade press to see if any other business is already using the name you’ve thought about

2) Don’t break the rules: You can’t pick just any name for your company – there are rules to follow. For example, the name must end with ‘Limited’, ‘Unlimited’, ‘Public Limited Company’ or their abbreviations. Your company name could also be rejected if it’s the same as another company’s name or if it’s offensive. In addition, some names need approval from the Secretary of State before they can be registered, eg if you would like to include words like England and English in the name

3) Business name vs company name: The two are not the same so don’t get them confused. The business name is the name used for carrying on business and can be different from the registered company name. Business names aren’t registered with any government department any longer, however, some rules still apply for choosing your business name – check with Companies House

4) Secure a matching name for your website: Before finally deciding on the company or business name it is also worth checking that your preferred domain name is available. There is a body managing all the registered UK domain names on the internet, called Nominet. Nominet doesn’t proactively sell domain name registrations, but can provide advice on registering and maintaining your name. Buy a domain name now.

5) Trade Mark is a separate issue: Registering a name prevents another limited company from having the same name but it doesn’t mean that another business can’t use it, for example to name a product. If you also want your company name to be a TM, you need to contact the Patent Office. This is also worth doing to avoid getting into a difficult and potentially expensive situation where your company or business name proves to be a TM owned by somebody else. Find out more about how to take out a patent.

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