Subject: What you call your business can affect its value.
Minutes to read: 3
Having started two businesses, I found one of the fun yet daunting tasks to be naming the new company.
My first experience naming a company was with a 3-partner group, and we wisely decided to hire a marketing firm to identify names and help us with branding the company. That they did, with excellence. Our newly named company, logo and service mark were awarded one of two 'Best New Corporate Brand' in a national juried competition. We were very pleased.
As years passed and our company grew, I continued to feel this terrific new name was distinctive, but I also learned it really didn't create any business.
Can any name really create new business?
Yes, I believe it can. But not in ways you might think.
The use of 'names' that I'm referring to is not your legal company name, but rather what you describe your business as capable of doing. Your tagline should describe the value you bring to customers in the market segment you are building or already dominate - even as a small business.
Example 1: An advisor to our firm has a client in the business of selling insurance products and services for insurance industry customers. They sell by telephone, and they call themselves a telemarketing business.
The company is very successful. Sales exceed $9 million with annualized five year growth of 20 percent and excellent profit. They have the attributes of a solid company with staying power: good employees, business processes and systems.
What's attractive about this company is they've been an early adopter of outsourcing the sales function. They are efficient enough to earn a profit selling other company products, continuing to create value for their customers, even while adding a layer of overhead.
Example 2: A manufacturing client makes production tooling, dies and fixtures. My client calls the business 'a tool and die shop.' During a tour of the business, which he sold, the owner described what they make as 'the plain vanilla' tooling and dies.
He was underselling the business.
In fact, the business has developed a reputation for making top performing jigs that improve quality control during manufacturing. Their designs are simple to use yet durable, and the fixtures permit fast sample testing of parts as they're made, so adjustments can be made in real time. The customer saves many times the cost of these test parts in lower rejection rates and lost production time. Without any dedicated sales plan for these fixtures, demand is growing.
I know from experience that when our firm seeks buyers for Company #1, we will identify legions more prospects if we refer to the business as a sales function services business that gets results, than if I refer to it as a telemarketing business.
What if the owner of Company #2 targeted all manufacturing facilities within a two hour drive and stopped in to tell them his company can materially lower their part rejection and production downtime? Do you think revenue would climb?
Find your special product or service; most businesses have them. Then build your company name and sales plan to let the world know what your business is capable of doing. By taking this step you will add surprising value to your company before you exit the business.
