Brand + Business x Christine Moody*
In the whirlwind and excitement of starting your own business, the founder often resorts to using their own name for the company name and the brand name (I know I did when I started!). While it may be easier to register and trademark your own name, doing this is not without risk. If you want a recent example, there is no need to go any further than Dick Smith.
This week Dick Smith
(the company and the brand) went into voluntary administration. Dick Smith (the person) sold Dick Smith (the company and Australia’s oldest electronics retailer) to Woolworths in 1982 for $25 million. According to The Sydney Morning Herald
article today, “Woolworths then sold it to Anchorage Capital Partners in a deal worth $115 million in 2011 and then floated it with a market capitalisation of $520 million, less than two years later”. The article goes on to quote Dick Smith (the person), “The company’s eponymous founder, entrepreneur Dick Smith, labelled the float price “clearly ridiculous”. This week Dick Smith (the company) halted trading on the Australian Stock Exchange and the share price nosedived (currently AUD$0.355
). This is the risk of selling your name with your company—when things are going well it is not a problem but when you sell the company (and your name) you lose control.
Three main reasons not to name the company after yourself include:
- A burden in negotiations—what happens if future generations do not want to be involved in the business; and also might become a burden as the family does not want to sell something with you name on it
- An inetricable link to your products—when you name becomes linked to the company that you sell, you can no longer use your own name for future products
- Your reputation on the line—especially when the company is public and the company fails—your name is always linked to that company.
When naming your start up or new company, it is best to start with the end in mind and think about the risks from the very beginning rather than during its sale or takeover.
And to end on a positive note, it is also worth saying that there are many successful companies named after their founders—for example, Tata Group, Cadbury, Colgate-Palmolive et al. The main thing to remember is that if you use your name for the name of your company/your brand, and the reputation of that company has been damaged, it is harder to build your reputation back up if your name (the person) has been destroyed by your name (the company/the brand).
*Christine Moody is one of Australia’s leading brand strategists and the founder brand management consultancy, Brand Audits. With more than 30 years’ professional experience, Christine has helped a diverse client base of local and international brands, including Gold Coast City Council, Hilton Hotels, and Wrigleys USA, to develop, protect and achieve brand differentiation. Her particular interest is personal brand audits to assist executives realise their full potential.
For more information: firstname.lastname@example.org or +61 419 888 468.