Some entrepreneurs don’t give a lot of thought to their business name. The current fad in business naming seems to be developing names that seem to be more flash than substance and attempt to be fashionable or cool rather than illustrative and useful. They point to examples such as Google or Yahoo, and try to fashion their own names based on that.

It is important to bear in mind that, while Google and Yahoo quickly became businesses, they didn’t start out that way. Google began as a research project and Yahoo was a humble web guide. They both had an established audience and market before they became actual businesses.

For a startup business, is an unusual name really the way to go?

Let me throw an unusual name out at you: Frafnoo.

What does Frafnoo do? Is it an up-and-coming search engine? Is it a marketing company? Maybe it’s a company that makes environmentally-friendly packing materials for shipping containers?

The fact is, Frafnoo doesn’t really tell you anything. The entrepreneurs at Frafnoo will have to spend a considerable amount of energy, and perhaps a significant amount of money, to market Frafnoo and explain exactly what they do.

Some will be tempted to just put “Frafnoo” on all their business stationary and communications, leaving potential clients scratching their heads. If I’m looking for a car rental service, is Frafnoo going to be the first thing I look up? “See what Frafnoo can do for you!” I don’t know what Frafnoo does; why would I call them out of the blue? Maybe I don’t want to be stuck on the phone with someone trying to sell me shares in an oil drilling company!

It’s important that your business name give prospective clients some idea of what you do. It should also be something that doesn’t sound too out of place or too “out there” for your industry. Frafnoo might not be the best name for an investment firm.

That’s not to say that a good name cannot attract attention. If Frafnoo is your choice, you can use it, but don’t use it alone. Your best bet is to name your company something like Frafnoo Search Technologies. Or, Frafnoo Marketing. Or, Frafnoo Communications. Or even Frafnoo Pizza.

For a startup, you don’t want to have to spent a lot of time and money just to explain to people what you do. If your name gives some indication, that’s going to save a lot of wasted effort, not to mention time. People won’t be contacting Frafnoo Oil Drilling to inquire if you do dog grooming. They won’t be calling Frafnoo Pizza to order packing peanuts. Just choosing a descriptive name can save you a lot of marketing effort.

In the future, the day may come when Frafnoo Integrated Electronics becomes synonymous with cool electronic gadgets. The day may come when Frafnoo Home Appliances becomes synonymous with washing machines and toasters. The day may come when Frafnoo Search Technologies becomes synonymous with Internet searches.

And, if that day comes, you can always drop the description, and change your name to Frafnoo, Inc. But, until that day comes, your best bet is to have a descriptive name to inform potential clients what you do.

By the way, if you decide to name your business Frafnoo and become a multi-millionaire, a naming fee would be appreciated. $1,000 sound fair?

Have you frafnoo’d today?

The following information pertains to people operating within the United States. If you are outside the U.S., please check with your local government officials or an accountant or other business professional to learn the requirements where you live.

Business licensing is something that varies, often widely, from state to state and county to county within the United States. Plus, cities and townships and other forms of government may have their own regulations and requirements.

Do you really need a business license?

Of course, the proper answer to that is almost always “yes.” But, if you’re not planning on selling anything, and perhaps working simply as an affiliate or making money through ads on your site, or if you just plan to run your “business” as a hobby to hopefully make extra income, then you might be able to get away with not having an actual business license. And, if the aforementioned is true for you, in some areas you might not even be required to have a business licenses for that type of “business.” But, of course, check with someone local to you, such as an accountant or government official, for the right answer as it pertains to where you live and what type of business you want to be in.

Don’t forget that, even if you don’t have a business license, you still will have to report any income on your taxes! The potential downside of not being considered an actual business is that you won’t be able to deduct any expenditures. Again, you want to talk to a tax professional or your accountant about these things.

Having a business license will be especially important if you do plan on selling any merchandise. Many wholesale merchants will not sell to you if you do not have a business license!

Some enterprising people will just start operating their business, whether locally or online, without any type of business license, to save money while they try to determine what type of business might be profitable for them. Then, once a business takes off, they’ll get a license to be official. While you may be able to get away with this, it is perhaps not advisable from a legal or tax point of view.

In most cases, a business license is fairly affordable, depending upon where you live and what you consider affordable. Also, it is usually straight-forward. You’ll probably just need to fill out a simple form, write a check and that’s it! It’s usually an easier thing to do than what you may expect. Again, the best thing to do is consult with someone locally who knows all the local requirements, as well as state and federal requirements and who can also advise you on tax issues, including sales tax requirements. It sounds like a lot, but it is probably going to be the easiest part of starting your own business, so don’t let the fear of paperwork stand in your way!

You’ll also want to give due consideration to your business name, but that will be a subject for another post.