Business Credit: What's in A Name?

A reader sent me this question about using her name in business:

I have a fairly common name that is often confused with another well-known person with the same name. I have added my married name to my website in hopes of differentiating myself. However, my married name is not my legal name and so I will have to obtain credit in my legal name. I am wondering what kinds of problems this may cause?
 
A name is an important part of your business and it’s smart to think this through carefully in the beginning. Even existing businesses may want to review their business names to see if the one they have chosen is best serving their purposes.
 
My first question for this reader, let’s call her Lisa, is whether she has formed a business entity. Looking at her website, it appears she is still operating as a sole proprietor, which is the worst type of entity to have more many reasons (tax, asset protection, etc.) So that would be first recommendations: create a business entity. When she does, she will have to choose a name for her business, and that name can be almost anything she dreams up, from "Lisa Inc." to a new made-up word. Even then, there are guidelines for choosing a business name:
 
“If you go with your personal name and you want to someday sell the business think ahead,” warns small business attorney Garrett Sutton. “If you eventually sell your business, the buyer is going to want the rights to your name. And what if those buyers turn out to be sleazy operators once they take it over? Your name can suffer. Also remember that when Famous Amos sold his brand he couldn’t ever use his name again.”
 
No matter what name you choose, Sutton also advises getting a trademark if your plans are to build up a brand. It’s an asset you can sell when you sell your business. He offers a free ebook, Winning with Trademarks, at Sutlaw.com.
 
Make sure you research prospective names carefully. In Lisa’s case, it was a good thing that she caught the potential mix up sooner rather than later – and she was willing to look at alternatives. But many entrepreneurs aren’t so flexible. They come up with what they think is a clever name, and as long as no one locally is using that name, they think they are fine. But once they've printed business cards or created a website, it's much harder to let a name go.
 
Be careful to avoid a name that can be confused with another company. “Common/generic names are more likely to have business credit reporting mix ups, especially if they are both located in a geographic area,” warns Alex Cote, VP of Marketing at credit reporting agency Cortera. “We’ve seen company names in the same city or region and the only difference is “Inc” vs. “ LLC.” 
 
It’s understandable that if you are billing yourself as a consultant or subject matter expert, you may want to put the focus on your name, rather than a more generic business name. But the two may not be mutually exclusive. I once interviewed Gary Ryan Blair, a.k.a.  The Goals Guy, on my radio show. Gary is the name associated with “The Goals Guy,” and he is well known in his own right. But the company’s name is The GoalsGuy Learning Systems, The Goals Guy(tm) is protected by trademark, and if Gary decided to sell the company, GoalsGuy Learning Systems could survive without him.
 
Before you decide up on a name, I’d recommend you at least research it on Google, Twitter, and Facebook. Try basic searches on the major commercial credit reporting websites to see if another business already has a similar name: Cortera, DNB, Experian. Check USPTO.gov to see if you come up with any potential trademark conflicts.
 
Lisa has already decided it’s not feasible to use her given name for her business. It’s too likely to get mixed up with someone else. I would recommend she do two things. As I mentioned earlier, the first would be to create an business entity – LLC, S or C Corp., depending on her needs – and find a business name that works.

The second would be for her to consider legally change her name to include her husband’s last name, the one she will be using for her business. From a legal standpoint, Sutton says she can legally continue to use her given name and go by her married name professionally. Since consistency is essential when dealing with business credit agencies, I suspect that trying to juggle her given name and married name will eventually become very confusing and lead to more problems down the line.