Tag Archive: limited

How To A Choosing a Company Name

How To A Choosing a Company Name

When forming a limited company the name of the company can be an important decision. Some people may choose the first name that they think of and others may select a ready made company for speed or because they like a particular name. However, many businesses may prefer to select a company name that either clearly distinguishes itself from its competitors or contains something unique or personal. Company names can be chosen for different reasons. How To A Choosing a Company Name

One of the most common ways of selecting a company name is to use something personal. A quick look through your local newspaper will probably introduce you to many personalized business names. Johnson Consulting Limited, T Smith & Son Limited, Stephens & Barley Limited are some fictional examples of what may be found. This may instantly make a company recognizable locally, it can be deemed as more personal by its customers, and often works well within geographical areas. However, it does little to tell new customers what your company does. How To A Choosing a Company Name

A popular choice for a small business is to choose a name that is ‘descriptive’. This tells prospective clients exactly what your company does. Examples of this may be to call your business The Window Company Limited, City IT Consultants Limited or The Advertising Agency Limited. Whilst this does serve to reinforce your primary business it offers little differentiation and may easily be adapted by competitors. How To A Choosing a Company Name

A less personal option is to use a company name that is ‘associative’. This type of company name helps to create an image or connection to your business activity. It is less direct than using a descriptive name but helps to position your company’s name within the market through peoples understanding of what words mean. For example a flick through the Yellow Pages will offer plenty of examples of this. A hairdresser called Classic Cuts or a printer called Select-a-print Limited are examples of what may be found. These names offer some differentiation but may not ultimately set your company aside from its competitors. How To A Choosing a Company Name

An alternative is to choose a company name that is ‘freestanding’. These names are completely abstract and not related to the companies business activities. A fictional example may be to call your catering company Zedoc Limited. There are many popular brand names that illustrate this point. Consider, Kodak, Gillette, or Mars, these names will probably be instantly recognizable to you and conjure up a particular product or business. This is a good way of setting your company aside from the competition but it is important to consider the market that you operate in. Will your prospective clients know what your business is offering? How To A Choosing a Company Name

Choosing a company name may be a simple process, but it is not uncommon for people to deliberate over names for quite some time. Whilst company names can, and often are, changed during the life of the company most people like to choose a name that they like from the outset. Therefore consider your market, how much you want to differentiate from your competitors and what your company name should say about your organisation. Once the decision is made focus on the important business of making your company a success. How To A Choosing a Company Name

 

The Silent Partner: Boon or Bane?

The Silent Partner: Boon or Bane?
by Erin McDermott.

Psst. Is that silent partner you’re seeking really the best move for your small business?

When it comes to finding additional funding these days, it’s sometimes a tough road. As a result, people are looking at other avenues of capital, taking on all types of new partnerships, and even tapping into money through crowd-funding sites such as Kickstarter, Indiegogo, and AngelList.

Traditionally, silent partners have been the go-to investors, often family and sometimes friends, who pump in funding but also agree to stay out of day-to-day operations. They get a share of the profits and—unless there is a limited partnership agreement that rules out liabilities—risk taking a hit if an enterprise runs into trouble. Their presence is no secret to people familiar with a company, and often they are prized for their industry contacts or standing in a community.

So why choose to remain silent? There can be several reasons. For some investors, it’s a way to avoid the unwanted entreaties of others who also are seeking capital. Others might use a silent partnership to keep quiet about the extent of their business portfolios or to stay one step removed from a venture that they don’t want to be publicly identified as backing.

So, is this silence really golden for a small-business owner?

PQ_SilentPartners.jpgWhat you don’t get for your money

Mitchell D. Weiss doesn’t see much value in the proposition. He’s a longtime financial-services executive and entrepreneur who now teaches finance at the University of Hartford and is the author of Life Happens: A Practical Guide to Personal Finance from College to Career. To him, owners who recruit the strong, silent type of partners are missing a critical opportunity to gain knowledge from others who know the stakes and have years of experience and connections that are priceless for an entrepreneur.

“I wouldn’t want money from people who aren’t going to help me. I want someone who isn’t just a checkbook, but someone who’s in a position to mentor me and offer advice,” Weiss explains. “What’s more important for entrepreneurs is to seek out people who can give you good feedback. Not someone who hasn’t made a payroll, or can’t relate because they’ve never faced the pressure of running a business.”

Weiss himself has been there with business relationships both silent and not so silent. He recalls dealing with a principal at one of his early ventures who declared that he “likes his partners limited” and made clear that he wanted little advice from others, even while seeking investors. “That’s also known as ‘Give me the money and shut up,’” Weiss says now, laughing. “In the end, I learned a lot of good things and a lot of lessons about what not to do.”

Jaine Lucas also sees many entrepreneurs missing the boat.

“One of the issues with crowd-funding is you get the money, but not the advice, coaching, and mentoring you’d receive from angels, VCs, or others who might financially back your company,” says Lucas, an entrepreneur, former Fortune 50 marketing executive and now executive director of the Innovation & Entrepreneurship Institute at Temple University’s Fox School of Business in Philadelphia. “Most entrepreneurs will tell you that access to coaching and other people’s networks are just as important, if not more so, than the money.”

There’s always an exception

But Lucas does see the value of silence with one often-tapped group of investors: friends and family.

“They are often too involved emotionally and cannot see things objectively,” she says. “I see these things all of the time with our younger entrepreneurs who have very little access to capital other than credit cards and friends and family, so they take money from Mom and Dad. The problem is, to Mom and Dad, this promising entrepreneur is still their baby—and they don’t know anything! I see so many family relationships really impaired by money—and money has a way of blowing things up.”

One way to avoid that conflict Lucas says, is to make sure terms are clearly outlined well before any funds are invested, including whether the friend or family member will have any right to input in the venture. “Sadly, it isn’t treated as seriously as it should, and agreements need to be put in place before any money exchanges hands,” she says.

Today, most investments come with an extra two cents

“I see [silent partners] as something that’s becoming a thing of the past,” says David Luk, the 33-year-old chief executive of Quewey, a startup online network of experts that facilitates business expertise via free question-and-answer platforms and paid phone-consulting sessions. As people become more sophisticated about investing, Luk says they should feel the urge to provide advice so they can contribute added value to their investment.

“If you asked me to go out and search, in this early funding round, for investors who want to be silent, I think it would be hard to find that. And frankly, I don’t want that,” Luk says. “If I have a choice between an investor who has a willingness and ability to help versus someone who prefers to stay silent and on the sidelines, I’d rather have the person who can add value and not just the capital. We’re a startup and it seems like a waste of a potential resource.”

Often, it’s elusive resources like experience that are most important for growing small companies—and sorely needed at crucial turning points—such as getting down to the business of suing that new capital wisely and making money for all of your investors, silent or not.

Weiss says he’s seen entrepreneurs get an overzealous sense of “We’ve got it!” when funding does arrive. “Investors want that money back, and want their investment to grow—you’re just renting it,” Weiss points out. “It doesn’t just come with a lipstick kiss on the bottom of a Hallmark card.”