Here is a partial list of the most important legal issues you face on the internet. Learn them.

Age

The age of your users impacts the website. According to Federal Trade Commission regulations through the Children’s Online Privacy Protection Act (COPPA), a website must get a parent’s permission for children under 13 to disclose information.

Also, remember that children under 18 should not be permitted to view information which is adult in nature. In addition, children under 18 may not be able to agree to contracts such as your website user agreement and purchase contracts. Finally, FTC also regulates advertising and other content directed at children.

Bulletin Boards, Chat Rooms, Etc.

Any posting ability by users should be subject to site submission rules and a user agreement. The rules should obtain users’ consent not to post pornographic, defamatory or infringing materials and, through your user agreement, consent to your company not being liable for other users taking such actions.

Copyright

The footer of your site should display a copyright notice for the content of the site. The notice should read “� [date] [copyright owner name] All rights reserved.” You should also deposit a copy of the site with the Copyright Office to record ownership of the site’s content, look and feel.

Finally, under the Digital Millennium Copyright Act, depending on the purpose and the users’ activities on the site, your company may be eligible to register for limited liability offered by the act for the site. You should consult your attorney for review of the act and how to register.

Domain Name

When building your website, domain names are an important part. Often they are directly tied to your business name, your logos and your brand. Businesses often fail to give proper thought to which domain name to choose.

Picking a domain name should have the same careful thought as naming other products or services. Choosing a domain name should include analysis of trademark law in relationship to the name. Under current law, domain names may be awarded to trademark holders over others through arbitration or litigation. This means that having trademark registration in the same name as your domain name may ensure that you retain ownership of the name.

Export

If persons from other countries use your site, then you are exporting. If you sell to such persons, you are exporting the item you sell and entering into contracts with persons of other countries. If you use encryption on the site, then you are exporting technology regulated by the Department of Commerce and Defense.

Various government departments regulate the countries with which U.S. companies may do business and when a company needs an export license to transmit items, technology or information abroad. Doing business with certain countries, such as Iraq, Iran, Cuba, North Korea, Syria, Yugoslavia and others, is severely restricted.

Depending on the information on your site, what kind of business you do, the technology and information involved, your site may be subject to these regulations, and you should consult with your attorney about these business decisions.

Framing

It is important to be careful how your website frames to other sites. There have been trademark cases regarding consumer confusion over which site is which, and which site is the source of the content and data.

Also, be careful, because some sites’ “terms and conditions” and/or “user agreements” prohibit collecting and reprinting data displayed on the site–even if such data is factual, such as times and places for events.

Giveaways

Sweepstakes, contests, lotteries and giveaways are governed by state and national laws as to how they must be conducted. Florida and New York require registration with the state if the prizes are over $5,000 in value. Most important, you should have rules outlining the terms and conditions of the giveaway.

The rules are an offer from the sponsor which the entrant accepts by entering. The offer, plus the acceptance, make a binding contract covering the giveaway.

Home Page

On the footer of the home page of the site, you should have a link to your privacy policy, your user agreement or terms and conditions, and your copyright notice.

Insurance

Be sure that your business insurance covers website activities. Often website activities are excluded from errors and omissions and other business insurance.

Lloyds of London and a few other companies have insurance specifically covering materials and sales via websites, including security of credit card numbers and other important data.

Jurisdiction

One of the primary reasons for having a user agreement is to better address the issues of jurisdiction. Under current law, website owners may be subject to jurisdiction and law in any state or country where its users are located. Being subject to the law of so many different locations makes trying to comply with the law and trying to assess your risk tricky.

An attorney can help you consider which markets are your highest risk and how to lower your risks through consultation with local counsel or blocking users from those regions. Additionally, you should consider that many foreign jurisdictions do not offer protections for intellectual property which are comparable to the U.S.

Therefore, if a user in such a region steals content or software from your site, you may have little recourse by law, and a hard battle to fight on foreign soil and in a foreign language.

Linking

When linking to other sites, you should consider two factors. One is what word or image you are using for the link and whether it is a trademark of another site or company. If so, you need the trademark owner’s permission to post the company’s trademark on your site.

Second, you should always link to the home page of a website since there have been “deep linking” cases claiming loss of advertising revenue which would have been gained if the users had been directed through the home page.

Metatags

Courts have not permitted use of another company’s trademarks as metatags on competitors’ sites. These cases arose when company A used company B’s trademarked term in the metatagging of company A’s site so that when a user looked for company B, company A would come up in the listing. For example, it would not be permitted for Coke to use the metatag “Pepsi” on the Coke website.

Notification

Under the Digital Millennium Copyright Act, there are required procedures for someone to notify a website that materials on the site may infringe on that person’s copyright. If the Digital Millennium Copyright Act applies, these procedures should be outlined in a notification policy on the site.

Obscenity

Materials which are considered “obscene” by state or federal law are not permitted on the internet and, especially, may not be viewed by children. What is obscene is based on the local standards of the viewing community. This makes prior determinations of what is acceptable somewhat complex. If you have questions about your site and its content, you should review them with your attorney.

Privacy Policy

If you collect any information from users of your site, using cookies or otherwise, the Federal Trade Commission requires you to have a privacy policy. The privacy policy should contain an explanation of how you collect the users’ information, how and where the information is stored, how the user can delete or change the information, and to whom the information is disclosed and for what purpose. The European Union also has similar and strict regulations on collection of information via websites.

Rules for Mail Order

The FTC and some states have guidelines for selling items by mail which have been extended to cover internet sales. These guidelines cover return policies, customer contact and other information about how to inform your customers about your products, shipping and sales procedures.

SEC

The Securities and Exchange Commission considers a website a means of disclosing information to the public about a company. Therefore any information disclosed on your website should be given the same review and consideration that your company gives all public disclosures with regard to “forward-looking statements” and “material” information.

Trademark

Trademarking the name of your company, logo, mottos and domain name is an important part of your business development and should be reflected on your website. Your nationally registered marks should display an � and unregistered marks should display a � or SM.

User Agreement

Having a user agreement or “terms and conditions” may be the most important part of a website. A user agreement requires each user to agree to be bound by a contract governing his or her use of the site by clicking “I agree” before being permitted to use the site.

Be aware that simply posting your legal agreement without forcing the user to click “I agree” prior to use is unlikely to bind your users to the terms. The user must take an active step through which she agrees to the terms and must not be allowed to proceed to use the site without such step.

A user agreement allows a company to:

• dictate how the site may be used (for example, for reading and printing materials)
• dictate how the site may not be used (for example, reverse engineering the coding tricks, copying content, for illegal purposes)
• dictate who may use the site (for example, persons over 18, US citizens)
• dictate procedures or policies for the site (for example, return policies, complaint policies, notification of copyright infringement policies)
• dictate your company’s waiver of implied legal warranties (for example, implied warranties of noninfringement, fitness for particular purposes, etc.)
• dictate the limit of your company’s liability for the site, other users postings on your site, sites you link to, etc.
• dictate jurisdiction for any disputes relating to the site

View Source

The ability for users to view the source code of nearly all websites by using the “view source” command in browsers means that the source code for your website is not protectable by trade secret law.

For something to be protected by trade secret law, it must not be publicly known, the owner must take some effort to keep the information secret, and the information must have monetary value to the owner. If the information is publicly available on the web through “view source,” the information is not a trade secret.

Warranties

Statements on your website about your products and services are express warranties to customers. It is important to carefully review all website text to be sure that what your company promises is true and corresponds with its other policies and advertising.

When you review, look for statements that are absolute statements which may be hard to prove or verify if the Federal Trade Commission were to request that you do so. Examples of such statements are: “Our printer works with all software,” “Our services are the best,” and “We guarantee that our product will always perform perfectly.”

Also, be aware that the FTC has specific guidelines that should be followed for use of the words “free” and “guarantee” in advertising or on your website.

Also, review your website to be sure that the text matches your regular business contracts. For example, your website should not promise a 60-day money-back guarantee if your contract states only a 30-day warranty.

XXX

If your site contains adult materials, be sure to consult your attorney regarding special legal requirements regarding notice prior to entering the site, notice requirements under federal regulations and other laws applicable to the adult entertainment industry.

Your Risk

The law is all about risk. The more time and money you spend following laws and regulations governing your business, the lower your risks of fines or successful claims by government or third parties.

It’s a mistake to think logos are more of a luxury than a necessity. Businesses once attracted customers because they were the only game in town, so to speak. But that’s no longer the case.

Today’s highly competitive industries, global markets and visually oriented consumers have catapulted the logo to prominence. Now your logo is one of the most critical components of your brand. So how can something so little make such a big difference to the success of your business?

1. Your branding efforts not only start with your logo but are dictated by it. Your logo appears on all your sales tools, from your business cards and stationary to your website. As a result, your logo design influences the design of all your sales tools–for better or worse. A professional-looking logo can be leveraged to create professional-looking materials. A poorly designed logo can’t. In other words, you need a “brandable” logo–one you can make use of when designing other materials to brand your company.
2. Your logo is a quick visual cue that conveys the essence of your brand in an age when image is everything and time is short. Perhaps you’ve heard the writer’s lament that “nobody reads anymore.” In today’s markets, not only do you face ever-increasing competition, you also face an audience accustomed to visually stimulating media, convenience and instant gratification. Sure, a few people may read your entire ad, more may read some of it–but everyone will SEE it. The overwhelming amount of choices faced by time-crunched consumers forces them to identify shortcuts. Your logo is such a shortcut: it instantly conveys your brand message and emotional appeal.
3. Awareness and familiarity are keys to growing your business, and your logo is instrumental in both areas. Your logo is your brand’s most basic graphic element. It ties together all your sales materials–in fact, your logo may be the only visual element your materials have in common. The right logo helps solidify customer loyalty while differentiating you from the competition.
4. Your logo may be the only thing by which a potential customer can judge your business. Think of small newspaper or Yellow Pages ads. Often all that fits in these small spaces is your contact information and your logo. If your logo projects the right image, it may be the sole reason someone decides to try your company. Conversely, if it looks unprofessional or unclear, it alone may be the reason they choose to look somewhere else.
5. Your logo affords a unique opportunity for you to look like a bigger (that is, more established) business than what you are. With the right logo, you can look like a larger company that’s been around for awhile even if you have only one employee and just opened your doors last month. People who see it will associate the positive attributes of big companies–like security and financial stability–with your company. And you can still deliver the entrepreneurial qualities–like personal attention and superior customer service–that you’re known for.

Building a solid brand identity is pivotal to success in business today. Lay the right foundation with a professional, brandable logo.

It’s a great idea: You found the perfect niche market, lots of customers, profit potential galore, the ultimate location and a stellar e-commerce site.

The only problem — where to find all the products you need to stock your shelves.

This happens all the time with entrepreneurs. Even if you come up with a brilliant idea of a product you want to sell, there’s still the tiny detail of finding the actual product. You want to sell AAA but “Where exactly can I get a supply of AAA to sell and get it for a fair price?”

The good news is, finding what you need isn’t quite the needle-in-a-haystack task it’s envisioned to be.

“My experience is, there are a lot of existing channels used to match up manufacturers and distributors of products. Trade shows and trade magazines are two of the best,” says Roger Green, co-founder of Cullinane & Green Inc.

Trade shows alone offer multiple opportunities for you to not only spot upcoming trends, but also to network with potential suppliers and hopefully find just the right product source. The New York International Gift Fair, for instance, attracts thousands of exhibitors, organized by type of product. Attending a trade show also gives you the opportunity to demonstrate you mean business. “By being there, you establish yourself as someone being in business as opposed to being a consumer.

The overwhelming majority [of attendees] are serious buyers,” says Green, who, along with partner Joe Cullinane, has a diverse background in sales, marketing and senior management that’s familiarized him with the ins and outs of product sourcing. “You also get to compare prices across a range, and you get a good sense of the business without having to put a lot of air miles into it.”

Trade magazines, meanwhile, can be an inexpensive way to find companies with which you want to correspond. Scour them frequently for mentions of any companies that might offer the products you need, then try to find out whether they’ll be exhibiting at any upcoming trade shows you can attend.

Trade organizations or industry associations related to the products you’re interested in are yet another potential source of valuable contacts, including international companies. “[These organizations] have trade missions, and they have access to manufacturers from other countries,” says Green. He notes that one of their main goals is to match up buyers and sellers.

So how do you go about finding the right industry association? Check out these resources for help in locating the proper channels:

• Directory of Associations from Concept Marketing Group Inc.
• Gale’s Encyclopedia of Associations. And if you’re not interested in purchasing your own set, most large public libraries carry a copy in their reference department
• National Trade and Professional Associations of the United States

“You should also look at companies that are regional,” adds Cullinane, author of “21st Century Selling” and adjunct professor of marketing at DeVry University’s Keller Graduate School of Management. “[Look at] retail stores that are very successful in one [geographic] area and not selling anywhere else.”

Start by contacting someone at the company or store and asking them whether they might want to sell their product in your hometown. “If something’s been successful in one area, you’ll find the company will want to expand but just don’t have the resources to do it,” says Cullinane.

Image Counts

Finding the suppliers you want is just the first step toward stocking your shelves with the proper inventory. Next, you’ve got some impressing to do. “You have to be perceived as a company and not a consumer,” stresses Cullinane.

“You have to present yourself as someone who is seriously interested in building a business,” adds Green, who advises establishing yourself as a business entity as opposed to a sole proprietorship. ” ‘Inc.’ makes all the difference in the world in [the company extending you] credit in the future.”

Keep in mind, also, that some firms, especially international ones, often prefer working with registered wholesalers of their products as opposed to retailers, says Green, so be prepared to inquire with a particular company about how you might become one. Companies that offer this option to buyers will likely ask you to fill out a few forms and provide some details on your banking history and so forth.

You may need letters of credit and references in order to prove your ability to make good on your word. The advantage of becoming a wholesaler? Wholesale rates, which are often well below the retail prices of a given company.

When making that initial contact with a potential vendor, be prepared to talk about what you do and why they would want to do business with you. Letters of credit from your bank, and letters of reference from people who know you and can vouch for your credibility, are also key-those can help you get an appointment with the vendor in the first place. Green advises starting small:

“Find an easy one, and then build from there. If you start dealing with someone local who knows you and can see you, in a few months, you’ll have a track record and can use the first one as a reference. It’s like starting a fire: use kindling first, not the log.”

Look to your social network to determine whether you might know anyone who can help you. Make sure you tell friends and family what you’re doing-you never know who they might know. “It’s amazing the results you’ll get [when you spread the word],” says Cullinane.

One caveat: If you do business with someone you know, make sure you clearly establish the terms of the relationship from the start. As Green cautions, “It’s still a business relationship at the end of the day,” cautions Green.

“There’s a saying among lawyers: The best contracts are drawn between people who don’t trust each other.”

So enlist the help of an attorney who knows the ins and outs of drawing up the kind of contract you need-the money will be well-spent in the long run.

So You’ve Got a Supplier

Once you’ve found the companies that manufacture the products you want to sell, you need to get samples and be sure they’re exactly what you want. “Be prepared to invest in that,” says Green. “Sometimes companies will supply samples at no charge, but not always. And don’t go looking for freebies-that can ruin your credibility.”

How many vendors do you need? “Just enough,” says Cullinane. In B2B situations, you’ll likely want at least two suppliers, maybe three. It’s a good idea to have backup suppliers in case something ever falls through with one of your regulars. “A lot of times you build your business around one supplier,” explains Cullinane, “and if something [happens to them], you could be out of business.”

Above all, remember the most important element of a successful retail business: the customer. Even if you’ve got a handle on where to get your product, you’ll want to make sure you haven’t forgotten the crucial step of determining whether that product will be met with a warm reception. “An entrepreneur needs to look at ‘What do my customers need that they can’t get?’ ” says Cullinane. “Satisfy that niche. Be the person who provides that.”

Click Away

• Use the Web in your search for suppliers. “With powerful search engines like Google, you can locate suppliers all over the world,” says product-sourcing guru Roger Green. “It’s a low-cost way to go exploring.”
• TheThomas Register online will help you locate companies and products manufactured in North America. You can also place orders online and view thousands of online company catalogs and Web sites.
• Don’t overlook the U.S. Department of Commerce in your search for suppliers. “Let them know you want to do business, and they’ll do some match-ups,” says Green.

Firms that are successful in marketing invariably start with a marketing plan. Large companies have plans with hundreds of pages; small companies can get by with a half-dozen sheets. Put your marketing plan in a three-ring binder. Refer to it at least quarterly, but better yet monthly. Leave a tab for putting in monthly reports on sales/manufacturing; this will allow you to track performance as you follow the plan.

The plan should cover one year. For small companies, this is often the best way to think about marketing. Things change, people leave, markets evolve, customers come and go. Later on we suggest creating a section of your plan that addresses the medium-term future–two to four years down the road. But the bulk of your plan should focus on the coming year.

You should allow yourself a couple of months to write the plan, even if it’s only a few pages long. Developing the plan is the “heavy lifting” of marketing. While executing the plan has its challenges, deciding what to do and how to do it is marketing’s greatest challenge. Most marketing plans kick off with the first of the year or with the opening of your fiscal year if it’s different.

Who should see your plan? All the players in the company. Firms typically keep their marketing plans very, very private for one of two very different reasons: Either they’re too skimpy and management would be embarrassed to have them see the light of day, or they’re solid and packed with information . . . which would make them extremely valuable to the competition.

You can’t do a marketing plan without getting many people involved. No matter what your size, get feedback from all parts of your company: finance, manufacturing, personnel, supply and so on–in addition to marketing itself. This is especially important because it will take all aspects of your company to make your marketing plan work.

Your key people can provide realistic input on what’s achievable and how your goals can be reached, and they can share any insights they have on any potential, as-yet-unrealized marketing opportunities, adding another dimension to your plan. If you’re essentially a one-person management operation, you’ll have to wear all your hats at one time–but at least the meetings will be short!

What’s the relationship between your marketing plan and your business plan or vision statement? Your business plan spells out what your business is about–what you do and don’t do, and what your ultimate goals are. It encompasses more than marketing; it can include discussions of locations, staffing, financing, strategic alliances and so on. It includes “the vision thing,” the resounding words that spell out the glorious purpose of your company in stirring language.

Your business plan is the U.S. Constitution of your business: If you want to do something that’s outside the business plan, you need to either change your mind or change the plan. Your company’s business plan provides the environment in which your marketing plan must flourish. The two documents must be consistent.

A marketing plan, on the other hand, is plump with meaning. It provides you with several major benefits. Let’s review them.

• Rallying point: Your marketing plan gives your troops something to rally behind. You want them to feel confident that the captain of the vessel has the charts in order, knows how to run the ship, and has a port of destination in mind. Companies often undervalue the impact of a “marketing plan” on their own people, who want to feel part of a team engaged in an exciting and complicated joint endeavor. If you want your employees to feel committed to your company, it’s important to share with them your vision of where the company is headed in the years to come.
• Chart to success: We all know that plans are imperfect things. How can you possibly know what’s going to happen 12 months or five years from now? Isn’t putting together a marketing plan an exercise in futility . . . a waste of time better spent meeting with customers or fine-tuning production? Yes, possibly but only in the narrowest sense. If you don’t plan, you’re doomed, and an inaccurate plan is far better than no plan at all.
• Company operational instructions: Your child’s first bike and your new VCR came with a set of instructions, and your company is far more complicated to put together and run than either of them. Your marketing plan is a step-by-step guide for your company’s success. It’s more important than a vision statement.
• Captured thinking: You don’t allow your financial people to keep their numbers in their heads. Financial reports are the lifeblood of the numbers side of any business, no matter what size. It should be no different with marketing. Your written document lays out your game plan.
• Top-level reflection: In the daily hurly-burly of competitive business, it’s hard to turn your attention to the big picture, especially those parts that aren’t directly related to the daily operations. You need to take time periodically to really think about your business–whether it’s providing you and your employees with what you want, whether there aren’t some innovative wrinkles you can add, whether you’re getting all you can out of your products, your sales staff and your markets.

Ideally, after writing marketing plans for a few years, you can sit back and review a series of them, year after year, and check the progress of your company.

Of course, sometimes this is hard to make time for (there is that annoying real world to deal with), but it can provide an unparalleled objective view of what you’ve been doing with your business life over a number of years.

What’s in a name? Just about everything when it comes to small-business success. The right name can make your company the talk of the town; the wrong one can doom it to obscurity and failure. If you’re smart, you’ll put just as much effort into naming your business as you did into coming up with your idea, writing your business plan and selecting a market and location. Ideally, your name should convey the expertise, value and uniqueness of the product or service you’ve developed.

There’s a lot of controversy over what makes a good business name. Some experts believe that the best names are abstract, a blank slate upon which to create an image. Others think that names should be informative, so customers know immediately what your business is. Some believe that coined names (names that come from made-up words) are more memorable than names that use real words. Others think most coined names are eminently forgettable. In reality, any type of name can be effective if it’s backed by the appropriate marketing strategy.

Do It Yourself?

Given all the considerations that go into a good company name, shouldn’t you consult an expert, especially if you’re in a field in which your company name will be visible and may influence the success of your business? And isn’t it easier to enlist the help of a naming professional?

Yes. Just as an accountant will do a better job with your taxes and an ad agency will do a better job with your ad campaign, a naming firm will be more adept at naming your firm than you will. Naming firms have elaborate systems for creating new names, and they know their way around the trademark laws. They have the expertise to advise you against bad name choices and explain why others are good. A name consultant will take this perplexing task off your hands–and do a fabulous job for you in the process.

The downside is cost. A professional naming firm may charge anywhere from a few thousand dollars to $35,000 or more to develop a name. The benefit, however, is that spending this money now can save you money in the end. Professional namers may be able to find a better name–one that is so recognizable and memorable, it will cut down your costs in the long run. They have the expertise to help you avoid legal hassles with trademarks and registration–problems that can cost you plenty if you end up choosing a name that already belongs to someone else. And they are familiar with design elements, such as how a potential name might work on a sign or stationery.

If you can spare the money from your startup budget, professional help could be a solid investment. After all, the name you choose now will affect your marketing plans for the duration of your business. If you’re like most small-business owners, though, the responsibility for thinking up a name will be all your own. The good news: By following the same basic steps professional namers use, you can come up with a meaningful moniker that works . . . without breaking the bank.
What Does It Mean?

Start by deciding what you want your name to communicate. To be most effective, your company name should reinforce the key elements of your business.

Gerald Lewis, whose consulting firm, CDI Designs, specializes in helping retail food businesses, uses retail as an example. “In retailing,” Lewis explains, “the market is so segmented that [a name must] convey very quickly what the customer is going after. For example, if it’s a warehouse store, it has to convey that impression. If it’s an upscale store selling high-quality foods, it has to convey that impression. The name combined with the logo is very important in doing that.” So the first and most important step in choosing a name is deciding what your business is.

Should your name be meaningful? Most experts say yes. The more your name communicates to consumers, the less effort you must exert to explain it. Alan Siegel, chairman and CEO of Siegel & Gale, an international communications firm, believes name developers should give priority to real words or combinations of words over fabricated words. He explains that people prefer words they can relate to and understand. That’s why professional namers universally condemn strings of numbers or initials as a bad choice. On the other hand, it is possible for a name to be too meaningful.

Naming consultant S.B. Master cautions business owners need to beware of names that are too narrowly defined. Common pitfalls are geographic names or generic names. Take the name “San Pablo Disk Drives” as a hypothetical example. What if the company wants to expand beyond the city of San Pablo, California? What meaning will that name have for consumers in Chicago or Pittsburgh? And what if the company diversifies beyond disk drives into software or computer instruction manuals?

Specific names make sense if you intend to stay in a narrow niche forever. If you have any ambitions of growing or expanding, however, you should find a name that is broad enough to accommodate your growth. How can a name be both meaningful and broad? Master makes a distinction between descriptive names (like San Pablo Disk Drives) and suggestive names.

Descriptive names tell something concrete about a business–what it does, where it’s located and so on. Suggestive names are more abstract. They focus on what the business is about. Would you like to convey quality? Convenience? Novelty? These are the kinds of qualities that a suggestive name can express.

For example, Master came up with the name “Italiatour” to help promote package tours to Italy. Though it’s not a real word, the name “Italiatour” is meaningful. Right away, you recognize what’s being offered. But even better, the name “Italiatour” evokes the excitement of foreign travel. “It would have been a very different name if we had called it �Italytour,’” says Master. “But we took a foreign word, �Italia,’ but one that was very familiar and emotional and exciting to English speakers, and combined it with the English word �tour.’ It’s easy to say, it’s unique, it’s unintimidating, but it still has an Italian flavor.”

Before you start thinking up names for your new business, try to define the qualities that you want your business to be identified with. If you’re starting a hearth-baked bread shop, for example, you might want a name that conveys freshness, warmth, and a homespun atmosphere.

Immediately, you can see that names like “Kathy’s Bread Shop” or “Arlington Breads” would communicate none of these qualities. But consider the name “Open Hearth Breads.” The bread sounds homemade, hot, and just out of the oven. Moreover, if you diversified your product line, you could alter the name to “Open Hearth Bakery.” This change would enable you to hold onto your suggestive name without totally mystifying your established clientele.

Begin brainstorming business names, looking in dictionaries, books and magazines to generate ideas. Get friends and relatives to help if you like; the more minds, the merrier. Think of as many workable names as you can during this creative phase. Professional naming firms start out with a raw base of 800 to 1,000 names and work from there. You probably don’t have time to think of that many, but try to come up with at least 10 names that you feel good about. By the time you examine them from all angles, you’ll eliminate at least half.

The trials you put your names through will vary depending on your concerns. Some considerations are fairly universal. For instance, your name should be easy to pronounce, especially if you plan to rely heavily on print ads or signs. If people can’t pronounce your name, they will avoid saying it. It’s that simple. And nothing could be more counterproductive to a young company than to strangle its potential for word-of-mouth advertising.

Other considerations depend on more individual factors. For instance, if you’re thinking about marketing your business globally or if you’re located in a multilingual area, you should make sure that your new name has no negative connotations in other languages. On another note, Master points out, if your primary means of advertising will be in the telephone directory, you might favor names that are closer to the beginning of the alphabet. Finally, make sure that your name is in no way embarrassing. Put on the mind of a child and tinker with the letters a little. If none of your doodlings make you snicker, it’s probably OK.

Chuck Brymer, president of naming firm Interbrand U.S.A., advises name seekers to take a close look at their competition. “The major function of a name is to distinguish your business from others,” Brymer observes. “You have to weigh who’s out there already, what type of branding approaches they have taken, and how you can use a name to separate yourself.”
Making Up a Name

At a time when almost every existing word in the language has been trademarked, the option of coining a name is becoming more popular. Perhaps the best coined names come from professional naming firms. Some examples are Acura, a division of Honda Motor Co. coined by NameLab, and Flixx, a name CDI coined for a chain of video rental stores.

Since the beginnings of NameLab, founder Ira Bachrach has been a particular champion of the coined name. He believes that properly formulated coined names can be even more meaningful than existing words. Take, for example, the name “Acura.” Although it has no dictionary definition, it actually suggests precision engineering, just as the company intended. How can that be? Bachrach and his staff created the name “Acura” from “acu,” a word segment that means “precise” in many languages. By working with meaningful word segments (what linguists call morphemes) like “acu,” Bachrach claims to produce new words that are both meaningful and unique.

“One of the reasons a new company is formed is that it has new value; it has a new idea,” Bachrach contends. “If you adopt a conventional word, it’s hard to express the newness of your idea. But as long as it’s comprehensible, a new word will express that newness.” Bachrach also admits, however, that new words aren’t always the best solution. A new word is complex and implies that the service or product you’re offering is complex, which may not be what you want to say. Plus, naming beginners might find this type of coining beyond their capabilities.

An easier solution is to use new spellings of existing words. For instance, CDI’s creation: “Flixx.” “Flixx” draws upon the slang term “flicks,” meaning movies. But the unusual spelling makes it interesting, while the double “X” at the end makes it visually appealing. Just as important, “Flixx” is more likely to be available for trademarking than “Flicks,” a factor that’s especially important to a chain operation interested in national expansion.

After you’ve narrowed the field to, say, four or five business names that are memorable, expressive and can be read by the average kindergartner, you are ready to do a trademark search.

Must every name be trademarked? No. Many small businesses don’t register their business names. As long as your state government gives you the go-ahead, you may operate under an unregistered business name for as long as you like–assuming, of course, that you aren’t infringing on anyone else’s trade name.

But what if you are? Imagine either of these two scenarios: You are a brand-new manufacturing business just about to ship your first orders. An obscure company in Ogunquit, Maine, considers your name an infringement on their trademark and engages you in a legal battle that bankrupts your company. Or, envision your business in five years. It’s a thriving, growing concern, and you are contemplating expansion. But just as you are about to launch your franchise program, you learn that a small competitor in Modesto, California, has the same name, rendering your name unusable.

To illustrate the risk you run of treading on an existing trademark with your new name, consider this: When NameLab took on the task of renaming a chain of auto parts stores, they uncovered no fewer than 87,000 names already in existence for stores of this kind.

That’s why even the smallest businesses should at least consider having their business names screened. You never know where your corner store is going to lead. If running a corner store is all a person is going to do, then, he doesn’t need to do a trademark search. But that local business may become a big business someday if that person has any ambition.

Ensuring that your name is going to be federally registerable is important. Also make sure that the individual states that you want to do business in will let you do business under that name. Enlisting the help of a trademark attorney or at least a trademark search firm before you decide on a name is highly advisable. The extra money you spend now could save you countless hassles and expenses further down the road. Try to contain your excitement about any one name until it has cleared the trademark search. It can be very demoralizing to lose a name you’ve been fantasizing about.
Trademark Classes

There are many misconceptions about trademarks and service marks and the level of protection provided for them under the law. One of the first misconceptions is that a trademark is all-encompassing. In fact, trademarks and service marks are filed under a specific class or classes. (For a complete list of eligible classes, visit the “International Schedule of Classes of Goods and Services” at the USPTO website.) There are 45 classes to choose from when filing for a trademark or service mark. Companies can file under one class or multiple classes depending on the nature of their product or service.

For instance, if a company has a registered trademark under class 15, musical instruments, another company using that same name in the pursuit of doing business in the category of musical instruments would potentially cause confusion in the marketplace and infringe upon a registered trademark. However, if a company does business within a different class, say class 1, chemicals, the potential for confusion would be extremely unlikely.
Conducting Your Own Trademark Search

If you’re going to search on your own, the Patent and Trademark Depository Libraries (PTDL) nationwide have directories of federally registered trademarks and an online database of registered marks and pending registration applications. You can also use product guides and other materials available in these libraries to search for conflicting marks that haven’t yet been registered. The U.S. Patent and Trademark Office’s (PTO) websitelists PTDLs in your state.

The site also has a free database of pending and registered trademarks; these are usually entered in the PTO database one to two months after filing. You can also contact the PTO at (800) 786-9199 for general information about trademark registration or to ask about the status of specific trademark applications and registrations.

It’s also a good idea to search the web and see if anyone is using the name without having registered it. Do this with more than one search engine for the most thorough results. Also, check with domain name registrars like Network Solutionsto see what’s available. This can help you find other businesses using your chosen name or similar names, and it can also help you narrow down your choices. If you can’t have your top choice of a business name as a .com domain, you might want to consider alternative spellings, choices or top-level domains (i.e., “.net” or “.us”).

If you’re lucky, you’ll end up with three to five business names that pass all your tests. How do you make your final decision?

Recall all your initial criteria. Which name best fits your objectives? Which name most accurately describes the company you have in mind? Which name do you like the best?

Each company arrives at a final decision in its own way. Some entrepreneurs go with their gut or use personal reasons for choosing one name over another. Others are more scientific. Some companies do consumer research or testing with focus groups to see how the names are perceived. Others might decide that their name is going to be most important seen on the back of a truck, so they have a graphic designer turn the various names into logos to see which works best as a design element.

Use any or all of these criteria. You can do it informally: Ask other people’s opinions. Doodle an idea of what each name will look like on a sign or on your business stationery. Read each name aloud, paying special attention to the way it sounds if you foresee radio advertising or telemarketing in your future. Professional naming firms devote anywhere from six weeks to six months to the naming process. You probably won’t have that much time, but plan to spend at least a few weeks on selecting a name. Once your decision is made, start building your enthusiasm for the new name immediately. Your name is your first step toward building a strong company identity, one that should last you as long as you’re in business.
Filing a DBA

Now that you’ve decided upon a name, do you need to file a DBA? If you’re structuring your company as a sole proprietorship or a partnership, a dba (“doing business as”) or fictitious business name allows you to legally do business under your new business name (rather than your own name). You may be required by the county, city or state to register your fictitious name.

Procedures for doing this vary among states. In many states, all you have to do is go to the county offices and pay a registration fee to the county clerk. In other states, you also have to place a fictitious name notice in a local newspaper for a certain amount of time. The cost of filing a fictitious name notice ranges from $10 to $100. Your local bank may also require a fictitious name certificate to open a business account for you; if that’s the case, they can tell you where to go to register. In most cases, the newspaper that prints your fictitious name ad will also file the necessary papers with the county.

In most states, corporations don’t have to file fictitious business names unless the corporations do business under names other than their own. For example, using dbas allows your corporation to run several businesses without creating separate legal entities for each one. But if you’ve just got one business that’s a corporation, incorporation documents have the same effect as fictitious name filings do for sole proprietorships and partnerships.