How Your Business Structure Can Save Time and Money

Imagine you’ve recently started selling shirts with elaborate designs.

One day you’re making a couple of hundred pesos hand-dyeing shirts then by some stroke of luck, (hard work, and perseverance) you find yourself with more customers you can deal with.

Keeping up with everything gets difficult and you notice you’re losing opportunities and potential customers. Personally handling customers while trying to keep all your papers in check becomes a task greater than one person can do. Not to mention how it’s starting to strain your personal time.

Does this strike a chord with you?

When you start a small business, your default business structure would naturally be a sole proprietorship. Sole proprietorship’s mean you have complete control over your business, and that your personal and business income aren’t seen as separate. This means that, yes, it’s easier to file the meager paperwork. But it also comes with its own set of limitations.

One of the most concerning setbacks of sole proprietorship’s is that you are held personally liable for your business deals. If the problematic customer in our story decided to sue you, or if your business suffered an outstanding loss, you (and your personal estates) are held personally responsible. Options for expansion is also limited, as investors generally favor more formal business structures. Sole proprietorship also means it’s mostly just you running the show, which calls into question how effectively you can manage your time without losing potential profit.

Your business structure has to evolve as your business grows. In our little thought experiment, we see how an outdated business structure can hinder not just the growth of your business, but also your personal well-being. All you want to do is to make cool shirts, a little cash, and maybe someone’s day! But trying to keep things together by micromanaging can leave you feeling winded and unhappy with what’s supposed to be your passion.

So what are your other options?

Sole proprietorship

The Good

•  Limited paperwork and minimal to no requirements needed to be met

•  Full control of all business operations

The Bad

•  Owner is personally liable for all risks and liabilities the business takes; there is no separation

•  Comparatively limited avenues for growing the business

•  Credibility and trust in the business’s brand takes longer to build

Partnership

The Good

•  Less liability compared to sole proprietorship; liability is shared between the partners

The Bad

•  More liability compared to a corporation; one partner is still held personally liable

•  A partnership’s income is split equally between the partners, unless arrangements have been made beforehand. This may be a source of strife for those who think their partners aren’t shouldering as much work as the other.

•  Transfer of ownership is restricted

Corporation

The Good

•  Protection of assets; owners are not held personally liable for the business’s risks and liabilities

•  Indefinite existence; the business can easily be run by different owners after the founders have passed

•  Management of business operation can be shared, not just shouldered by one person

•  Corporations are seen as more legitimate, making it easier to look for expansion opportunities for the business (i.e. looking for investors, building credibility, etc.)

•  Better tax management

The Bad

•  Setting up a corporation can cost more at the beginning when compared to a sole proprietorship

•  Heavier paperwork to be filed and requirements to meet when compared to a sole proprietorship

A partnership is a step towards splitting the liability between the partners, but ultimately doesn’t have the protection of a corporation, all while introducing more red tape than it’s worth. While limited liability corporations (LLCs) don’t exist in the Philippines, registering as a corporation will make you seen as a separate entity from your business, and your only liability depends on your share capital.

Things to Consider Before Making the Jump

Company Size

One of the most important things to remember about business development is making sure you grow your business at the right pace. Look for signs it’s time to change your business structure, but don’t force it if your business isn’t ready yet. Instead, take note of what entrepreneurs fail to plan for and make a solid game plan.

Requirements

It never hurts to know more about what you’re getting into. Whether you’re eager to make that jump or you just want to see your options. From registering as a corporation to assigning shares, the internet is here and willing to inform you of everything you need to know about changing your business structure.

Delegation

Now, if the climb from a small business to a corporation sounds daunting to you, never fear! The age-old solution to business management is this: to delegate tasks that hinder your productivity to someone else.

If you’re handling marketing, finance, and operations mostly on your own, you’ll eventually come to a simple truth: that you can’t do everything alone. Each of these take skills that most people get a degree for, so you can bet that learning to do all of these things at once will not only take time and drain you, but you’ll eventually come back to the important question of “why am I doing this?”

Leave the paperwork to someone else and focus on doing what you love. With services like Full Suite, you can have someone else bother with the business permits, accounting, and intellectual property. All with people who are ready to skip the jargon and explain your situation to you clearly, and whose transparency are guaranteed. So why not try it out and get back to what you love!

What’s The Difference Between a Partnership and a Corporation in the Philippines

Being an entrepreneur in today’s market is both a blessing and a huge responsibility. After all, meeting the demands of your customers who trust you is an honor yet an everyday challenge.

And while worthwhile, we agree it’s incredibly busy – which is why the team here at Full Suite did the brunt work for you. Read on as we break down the essentials you need to know about choosing between a partnership and a corporation.

Previously, we covered registration as an independent professional or a sole proprietorship. And even earlier than that, we broke down the basics of simply starting a business. Today’s article covers the differences between a partnership and a corporation, to help you decide which type of business to register so you can take yours to the next level.

The Main Differences Between a Partnership and a Corporation

For purposes of today’s discussion, we’ll be tackling the key differences between a partnership and a corporation among 3 fronts: definition, liability and income tax treatment.

Partnership

  • Definition – A legal form of business operation between two or more individuals who share management and profits.
  • Liability – Partners/owners are personally liable for the entity’s obligations & debts
  • Income Tax Treatment – The partnership is taxed according to the respective income of their partners. This income is subjected to the graduated income tax scale for individuals – a scale that shows the percentage of tax that will be applied to your income depending on your income level.

 

Corporation

  • Definition – A corporation maintains a separate and distinct existence from its stockholders, directors and officers; in other words, a corporation is viewed as a different person in the eyes of the law.
  • Liability – Based on its definition, your personal assets as a shareholder/director/officer cannot be used to pay the debts of the corporation; however, once you do invest, the capital you pay becomes part of corporate assets and your risk is directly proportional to this amount.
  • Income Tax Treatment – The income of the corporation is subject to the corporate tax rate and not the individual tax rate. You can view the Philippine Corporate Tax rate here.

 

3 Key Factors to Consider

So we’ve covered the basic differences between each business type. But how does this exactly incorporate into your decision making?

As you can see from the simple rundown, there are pros and cons to each type. Neither type is better than the other. It only depends on what you’re looking for. So for a start, you can consider these factors when making your decision:

1) Appetite for risk: a partnership’s taxes “flow” through the profits/losses of its partners (as opposed to its declared income as an entity) so this would mean being personally liable for those profits and losses should your business suffer. A corporation’s structure shields you from being personally liable beyond the extent of your investment.

2) Working style: whether it’s a limited partnership or a general one, the partners in a partnership have clearly defined roles and responsibilities in operating the business and only have themselves to answer to; as a corporation, you’ll have to answer to your shareholders, work with a board of directors, and manage your officers who are in charge of the day-to-day affairs.

3) Relationship with stakeholders: In relation to your working style, the structure of the business is also greatly determined by the working style of your fellow stakeholders. A few questions to help you make your decision:

  • Do they want to take an equally active role as you do in operating the day-to-day business, or do they view it as more of a passive type of income stream with shares?
  • Would you rather operate it yourself and have your partners invest without having a say in decision-making?

 

This is by no means a comprehensive list – but it will definitely help steer you in the right direction as you come up with the best type for your business.

In Conclusion

While we don’t have all the answers, we hope these facts and questions have helped you in determining better which type of business to register and why. Since these entities are unique in their own way, their required documents and registration processes differ per type. Learn more about how to register a corporation here.

The Expat Guide to Incorporating a New Business in the Philippines

The Philippines has proven itself to be among the top choices of expatriates, “expats” for short, when looking for employment opportunities. With the country’s thriving economy, there has been significant growth in consumer demand, exports, and investments—all of which contributed to the 6.6% GDP surge in the recent years.

These improvements made the Philippines a center for economic growth and foreign investments. In fact, according to the 2010 Census of Population and Housing (CPH), almost 200,000 foreigners are currently residing in different parts of the country, and this figure has increased as well since then.

Aside from expats testing the waters in the Philippines, more than a few have also considered incorporating and registering a new business in the country.

So, if you’re among them, here’s a quick guide to all the legal processes, costs, estimate period, and requirements needed such as proper business registration in the Philippines to successfully bring about your firm here.

 

The Expat Guide to Incorporating a New Business

1. Register with the Securities and Exchange Commission (SEC)

SEC, a national government regulatory agency, oversees every registered business entity in the Philippines. They control the approval of security registration statements, investigates on the violations against security laws, and imposes proper sanctions, as provided by the Securities Regulation Code, Presidential Decree No. 902-A.

Registering with the SEC is the primary step in the entire business venture so as to verify if your desired company name is available. Initially, you can perform a quick search through their online verification system, along with paying a reservation fee on site.

Upon approval, your reserved name is valid for 30 days with a corresponding fee of PHP 40. It only takes one day to complete this particular step. Further, renewing of the name should be done once its validity expires.

2. Pay the Paid-In Minimum Capital

As stated by the Corporation Code, Section 13, at least 25% of the capital stock indicated in the Articles of Incorporation by the Treasurer’s Affidavit should be paid at the period of incorporation. A proof of deposit is not necessary, but SEC entails a Treasurer’s Affidavit declaring that a deposit has been made.

If for same cases wherein the capital stock isn’t determined, the amount to be paid should not be less than PHP 5,000.

3. Notarize Necessary Documents

According to Sections 14 and 15 of the Corporation Code, proper notarization of the Articles of Incorporation, as well as the Treasurer’s Affidavit is necessary before proceeding to file with the SEC.

This may cost PHP 500 and would only take 1 day to accomplish.

4. Obtain Pre-Registered Taxpayer Identification Number (TIN)

Whereas you’ve already registered online with SEC, you should pay at the SEC to finalize your company registration in the Philippines and have the following documents to complete the process:

a.  Company name verification slip;
b.  Articles of incorporation (notarized) and by-laws;
c.  Treasurer’s affidavit (notarized);
d.  Statement of assets and liabilities;
e.  Registration data sheet with particulars on directors, officers, stockholders, and so forth;
f.  Written undertaking to comply with SEC reporting requirements (notarized);
g.  Written undertaking to change corporate name (notarized).

SEC usually takes an average of 2 business days to process all the documents before reaching a decision. Your TIN can automatically be obtained from the SEC Head Office from registration, but registering with the Bureau of Internal Revenue (BIR) is another step as well. This task is crucial in determining applicable taxes, paying your annual registration fee, and acquiring and stamping of sales invoices, receipts, and books of accounts.

Estimated cost for this task is the totality of 1% from authorized capital stock or subscription price of subscribed capital stock (the higher one but shouldn’t be less than PHP 1,000), legal research fee equal to 1% of filing fee that shouldn’t be less than PHP 10), By-laws of PHP 500, PHP 150 registration fee for stock and transfer book (STB), another PHP 320 for STB, and PHP 10 legal research fee for the By-laws.

5. Get a Barangay Clearance

Go to the Barangay Hall or Municipal Office where your business is situated, and bring your application form, SEC Certificate of Incorporation, approved Articles of Incorporation and By-laws, location plan, and contract of lease.

Corresponding fees differ for each barangay, but can range from PHP 300-PHP 1,000. It would only take one day to obtain the barangay clearance, given that the barangay captain is available for the day considering that he is one in authority.

6. Pay the Annual Community Tax

Go to the City Treasurer’s Office (CTO) and pay the basic and additional community tax. Your basic community tax would depend on your business type (association, partnership, or corporation), but should not be higher than PHP 500.

On the other hand, the additional community tax would be subject to the assessed value of the real property you own, along with dividends and earnings. The amount to be paid should not exceed PHP 10,000.

7. Get Business Permit to Operate from the Business Permits and Licensing Office (BPLO)

To be issued with a business permit, the barangay clearance is necessary, as it is considered a prerequisite.

Aside from the business permit, some companies (since they vary in nature) also need to secure other clearances or certificates such as a location clearance, fire safety and inspection certificate, mechanical permit, certificate of electrical inspection, and sanitary permit.

Obtaining a business permit takes an average of 6 days to process, and fees vary according to the LGU issuing it.

8. Have a Books of Account

BIR requires enterprises to register their books of accounts, which are sold in bookstores for around PHP 400. A set of journals usually consists of four books namely cash receipts account, disbursements account, ledger, and general journal.

For businesses with computerized accounting systems (CAS), it should also be registered according to the procedures set by the BIR Revenue Memorandum Order Nos 21-2000 and 29-2002. Within 30 days from receipt of application form (BIR Form No. 1990) and other necessary documents, the BIR Computerized System Evaluation Team would inspect and evaluate the CAS.

9. Application for Certificate of Registration (COR) and TIN at the BIR

From the fourth step of obtaining your TIN, an annual registration fee of PHP 500 should be paid at any accredited bank with payment form (BIR Form 0605). Your pre-generated TIN issued by the SEC-Head Office is indicated on the SEC Certificate of Registration, and must be registered and reported with the BIR for all internal revenue taxes it would be liable for.

Applying a COR with the BIR would require the following:

a. Duly accomplished and filled-out BIR Form No. 1903 (Application for Registration for Corporations);
b. Payment Form (BIR Form No. 0605);
c. SEC Certification of Incorporation;
d. Articles of Incorporation and By-laws;
e. Contract of Lease (with BIR Form No. 2000 and supporting BIR Payment Form as proof of payment of documentary stamp tax on the lease agreement);
f. Documentary Stamp Tax Return (BIR Form No. 2000) on the original issuance of shares and Payment Form (for the DST payment); and
g. Mayor’s Permit/Business Permit Application (duly stamped received by the Business Licensing Division of the local government of Quezon City).

Completing this step would only take one day, along with paying PHP 100 for the certification fee and PHP 15 for the documentary stamp tax—to be attached to Form 2303.

10. Pay the Documentary Stamp Tax (DST) at the BIR

A PHP 1 fee for every PHP 200 or fractional part of the par value of such shares of stock shall be paid for the documentary stamp tax on original issues of shares of stock. The DST return must be filed, while payment of tax shall be on or before the fifth day of the closing month of the SEC registration approval.

11. Obtain Authority to Print Receipts and Invoices from BIR

The Revenue Regulations No. 18-2013 issued by the BIR adopted an online system to authorize the printing of official receipts, sales invoices, and other commercial invoices. Securing this authority from the BIR is important before printing of such invoices.

The following documents should be submitted to the Revenue District Office (RDO):

a. Duly completed application for authority to print receipts and invoices (BIR Form No. 1906);
b. Job order;
c. Final and clear sample of receipts and invoices (machine-printed);
d. Application for registration (BIR Form No. 1903); and
e. Proof of payment of annual registration fee (BIR Form No. 0605).

12. Print Receipts and Invoices

All receipts and invoices must be printed in a ½ bond paper (8 ½ x 5 ½ cm) in duplicate, black print, and carbonless at a print shop. Usually, printing would take an average of 7 working days.

13. Have the BIR Stamp Your Books of Accounts and Printer’s Certificate of Delivery (PCD)

The print shop must issue a Printer’s Certificate of Delivery of Receipts and Invoices, which you need to submit to the BIR RDO with jurisdiction over the printer’s principal place of business for registration and stamping within 30 days. This step only takes a day to complete and doesn’t have any fees.

Aside from this, the following documents must also be submitted:

a. All required books of accounts;
b. VAT registration certificate;
c. SEC registration;
d. BIR Form W-5;
e. Certified photocopy of the ATP; and
f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and commitments of the taxpayer-user.

14. Social Security System (SSS) Registration

Registering with the Social Security System can take two days (without charges) and would require the following documents:

a. Employer registration form (Form R-1);
b. Employment report (Form R-1A);
c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; and
d. Articles of incorporation, by-laws and SEC registration.

Once these have been submitted, they will release the SSS employer and employee numbers. An SSS training seminar might be required after registration for everyone to be aware of their rights and obligations.

15. Philippine Health Insurance Company (PhilHealth) Registration

The following documents are necessary when registering your company with PhilHealth:

a. Employer data record (Form ER1);
b. Report of employee-members (Form ER2);
c. SEC registration;
d. BIR registration; and
e. Copy of business permit.

A copy of all forms will be provided upon submission of documents, which will serve as proof until PhilHealth gives the employer and employee numbers. Completion of this step would only take a day without any charges.

16. Home Development Mutual Fund (Pag-ibig) Registration

Registering with Pag-ibig can be done simultaneously with PhilHealth, without any charges as well. The following documents must be submitted:

a. Employer’s Data Form (EDF [FPF040]);
b. Specimen Signature Form (SSF[FPF170]);
c. Copy of SEC Certificate of Incorporation;
d. Copy of Approved Articles of Incorporation and By-laws; and
e. Board Resolution or Secretary’s Certificate indicating the duly designated Authorized Representative.

Incorporating and registering a business in the Philippines may seem to be a difficult and demanding task, but can really be rewarding in the long haul.

Simply follow all the steps mentioned in this guide to not miss out on important requirements and ensure compliance with business laws and regulations.

 

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BIR, DTI, SEC, PEZA: Which Government Agencies You Need to Register Your Business

So you’re all set to start a business in the Philippines. First things first, do you know which government agencies you need to register your business in? Let us help you out.

Once you have decided on the type of business you want to venture in and have a name for it already, it’s time to register it with the corresponding agencies so you can finally start operating legally! While the list of government agencies you have to be registered in might be overwhelming, we provide you with the “why’s” and “how’s” behind each agency to hopefully let you understand everything better.

Registering Your Business with the Government Agencies

 1. BIR (Bureau of Internal Revenue)

Who Needs to Register?

•  Individual

•  Sole Proprietorship

•  Corporation/Partnership

It all starts with the BIR. You cannot operate your business without your business tax identification number (TIN).

You need to do these at the BIR:

1. Register your business establishment and all its branch offices, if any. You do this at the BIR Revenue District Office (RDO) in the place where your business is located. Once you obtain your Certificate of Registration, you must display it in a conspicuous place within your business establishment.

2. Register your books of accounts. You accomplish this at the same RDO.

3. Request for permit to print and issue receipts and invoices. You must thereafter post a notice in your business premises stating that your establishment issues receipts; and that if no receipt is issued by the cashier, then the customer must ask for one.

In relation to no. 3 above, you must also request for a permit to use a cash register and point of sale (POS) machines, as well as a permit to use loose-leaf books of accounts, accounting records or a computerized accounting system. If your business has branches, each branch must have its own books of accounts.

Related Posts:

•  10 Easy Steps to Registering Your Business With the Bureau of Internal Revenue

•  Everything You Need to Know About the New BIR Ruling on Official Receipts and Invoices

•  BIR: Filing of Tax Returns is Now Electronic

•  A Freelancer’s Guide to Paying Income Tax

2.   DTI (Department of Trade and Industry)

Who Needs to Register?

•  Sole Proprietorship

Before you can conduct business in the country, you need to register a name associated to your business. This is called business name registration (BNR). This is required if a person will use a name other than his true name.

Don’t want to line up at DTI? Register your business name online instead.

Related Posts: 

•  5 Tips for Deciding a Name for Your Business

•  Is Your Business Name Taken? How to Check If Someone Beat You To It

3. SEC (Securities and Exchange Commission)

Who Needs to Register?

•  Corporation/Partnership

The SEC is an agency under the Philippine Department of Finance that is responsible for regulating the securities industry.

It supervises all registered business entities in the country (with the power to suspend and revoke registrations), investigate violations of securities laws and impose sanctions, and make policies with regard to the market in securities.

It also supervises stock and bond brokers as well as the stock exchanges.

4. PEZA (Philippine Economic Zone Authority) /BOI (Bureau of Immigration)

Who Needs to Register?

•  Corporation/Partnership

PEZA is handled by the Department of Trade and Industry.

The PEZA and BOI are focused on businesses that are export-oriented, specifically in designated Special Economic Zones. The BOI is the primary agency responsible for investment promotion in the country and offers a wide range of incentive schemes for both Filipino and foreign investors.

Why Do You Need to Register with PEZA?

Not all areas in the country can be built by various business entities because there are some that have to be preserved or protected due to environment and legal circumstances.  By this business registration in Philippines with PEZA, the agency can determine whether you are legitimate and allowed to do business operations in various selected areas.

PEZA Incentives

•  In general, enterprises located in ecozones are entitled to incentives that include:

•  An Income Tax Holiday (ITH) of 4 years for non-pioneer projects and 6 years for pioneer projects. Extension years can also be granted provided the company meets certain criteria.

•  After the ITH expires, a 5% Special Tax on Gross Income and exemption from all local and national taxes is applicable.

•  Zero taxes and duties in the importation of capital equipment, raw materials, machineries, and spare parts. An exemption on wharfage duties and export tax is applicable as well.

•  Zero VAT on local purchases and an exemption for all local government imposts, fees, licenses, or taxes.

•  Zero expanded withholding tax.

•  Non-fiscal incentives such as simplified import-export procedures, employment of non-resident foreign nationals, special visas for foreign employees in certain positions, and more.

Why Do Need to Register with BOI?

Among the incentives that BOI-registered companies enjoy are the following:

•  An Income Tax Holiday (ITH) commencing from the start of commercial operations: 6 years for pioneer-status new projects; 4 years for non-pioneer status new projects; 3 years for expansion projects; 6 years for new or expansion projects in less developed areas; and 3 years for modernization projects. Enterprises that meet certain requirements can also take advantage of a bonus ITH year.

•  Taxes and duties exemption on imported spare parts as well as an exemption on wharfage dues and export tax.

•  Reduced duty rates on capital equipment, spare parts, and accessories.

•  Tax credits on domestic breeding stocks, genetic material, raw materials, and supplies.

•  Additional deductions from taxable income on labor expense as well as necessary and major infrastructure work.

•  Other non-fiscal incentives such as the employment of foreign nationals, streamlined customs procedures, the importation of consigned equipment, and more.

5. Local Barangay

Who Needs to Register?

•  Sole Proprietorship

•  Corporation/Partnership

You need to secure a company barangay clearance first in the barangay where your business will be operating. It is also a requirement when registering for a Mayor’s Permit.

Here’s our 5-step guide on how to register for a barangay clearance for your business.

6. City Hall

Who Needs to Register?

•  Sole Proprietorship

•  Corporation/Partnership

 

A Business Permit is sometimes also referred to as a Mayor’s Permit, because it is processed at the City Hall – the office of the mayor. Securing a business permit from the Mayor’s Office can only be done after accomplishing two other registrations:

1. The registration of your business with the Department of Trade and Industry or DTI (for single proprietorship) or with the Securities and Exchange Commission or SEC (for partnership or corporation)

2. Securing a Business Barangay Clearance

Here’s our 7-step guide on how to register for a Mayor’s Permit.

7. SSS/PHILHEALTH/PAG-IBIG

Who Needs to Register?

•  Individual

•  Sole Proprietorship

•  Corporation/Partnership

The term “employee” denotes any person legally employed in the Philippines, any person compulsorily covered by the GSIS under the Commonwealth Act 186, or any person compulsorily covered by the SSS under Republic Act 1161. Such employee is automatically covered for these government mandated employee benefits. This includes self-employed individuals or freelancers.

Here’s our guide to registering for government mandated employee benefits.

 

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5 Tips for Deciding a Name for Your Business

 Fact: Customers hear the business name first and make an impression before they know anything about its products or services.

A professor at Babson College, Leonard Green suggests a business name should be catchy – quick, unique and easy to remember. “You have 10, 15, 20 seconds to catch people’s attention,” he says. “Just get in there and do things differently than what everybody else is trying to do, because that’s where the home runs come from.” You only get one first impression so you better make it count. The right business name can make all the difference when it comes to propelling your business – that’s how powerful it is.

It gets a bit complicated these days as well, with the huge growth in the availability of diverse marketing tools with which to promote your business – from Web sites to social media networking platforms – together with traditional forms as signage, invoice, business card and basic advertising. Getting your business name right the first time is more important than ever.

So how do you choose the catchy, powerful, branding business name? Here are 5 tips that can help:

5 Tips for Deciding a Business Name

1. Establish, Know, and Visualize Your Brand

Before anything else, you need to visualize your brand. Your brand is your business identity or personality. Yourbusiness name is more than just a name, it’s a big part of your company brand. Companies like Wow BrandingBrandings and Brands For The People offer worksheets and e-books aimed at helping you brainstorm, focus your ideas and create a stellar brand name.

Try to ensure there’s a story behind your name. Ask these questions:

•  What message do you want to portray?

•  What do you want people to think when they see your company name?

In this age of social media, content marketing and online communications; this is definitely an area we recommend you to focus on first.

 2. Brainstorm

This is the fun part. If you can focus on your brand and add creativity, the ideas will flow naturally. While it is a common tip that names be short, easy to pronounce, and remember, don’t cross out a name that is entirely new to the market. This has the potential to make your business memorable and provide a great opportunity for a back-story about your branding, especially if it has meaning towards your history.

During your brainstorming phase, use some of the tools that are available to get you inspired. A thesaurus is a must-have, and here are a few online tools to try out:

•  Dot-o-mator

•  RhymeZone

•  WriteExpress’ Naming Online

These are just focus areas you can work on in phases:

•  Variations with spelling

•  Words related to what you do and/or how you do it

•  Synonyms

•  Made up words

•  Words from quotes or other inspirations

3. Don’t Limit Your Business Name

While it maybe easy to choose a name that identifies what you do, you need to choose a name that has longevity. What you do right now can expand two years from now or you will diversify so don’t limit your name to an industry.

For example, if you are doing web site design for now a great way to ensure longevity is dropping the word “web” and simply use the word “design” for your business. This way, in case you expand to doing brand consultancy or logo design, your name will have your business covered.

4. Consider a Name That Makes Sense for the Business and Works on the Web

Think of a name that can scale with you and the presence you plan on undertaking. Consider the following:

a. Imagine how the potential name will:

•  Look (on business cards, website, advertisements, with a logo)

•  Sound (ease of pronunciation)

•  Be remembered (connotations the name may evoke)

•  Distinguish you from competitors (avoid trademark infringements)

b. Avoid:

•  Embarrassing spellings, abbreviations, profanities, potentially offensive undertones

•  Implied associations with organizations/people the business is not connected with

c. Since online presence is also important, consider:

•  Is your business name registered as a domain already?
Make sure your business name is available as a domain name. This will help you identify whether you can actually set up a website with a web address (domain name) that is clearly affiliated with your business. You can do a quick domain name search in the WHOIS database.

•  Is your business name social media-ready or friendly? Consider your business name across all social media handles. Be careful with similar-sounding or same-spelling brands or businesses. Check Facebook, Twitter, Pinterest, YouTube, Instagram, LinkedIn, etc for these. You might not think of using these for now but eventually it might come in handy for your business.

•  Is your business name e-mail friendly?

5. Test Drive and Get Feedback

Once you have a couple of possible names, get input. This can be from people who are your mentors, your family or friends, potential clients or colleagues. Ask for their impressions and suggestions.

You can also try to have a test market. You can make an online survey, focusing on a minimum number of questions. Pop Survey and Survey Monkey are two free websites where you can easily create your own professional online surveys.

A very great tool you can work with is Google. This can spell the difference in really branding and establishing your presence on the web.

•  Google Adwords’ Keyword Tool provides detailed information about the popularity of certain words and terms, including specific traffic numbers associated with them.

•  Google also provides a patent search function that searches the entire U.S. patent database.

•  Google Trends allows you to search through current and past search trends, so you can see when and why people have searched for your proposed business name.

•  Google gives you a macro view of the words and images associated with your idea. See what happens when you run your proposed business name through Google images, videos and even its translator. It will help give you a visual feel on how your proposed business name impresses upon people.

Get the name right, and you get branding as a by-product of your advertising.

How did you come up with your business name? Share your tips on the comments below.

 

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