What’s in a name? A lot. Branding is all about getting your name out there, from letterheads and email signatures, to stationery and corporate sponsorship. In an environment where the relationship customers have with your brand is so vital to the survival and success of your business, a name that is both unique and trustworthy is a winning formula.
Huge businesses share their names with the families who founded them and, in some cases, still run them. Globally recognisable names such as Ford, Louis Dreyfus, Mars, and Marks and Spencer stand out as successful family-name businesses. Much like a gambler is more likely to talk about the bets that win, we only hear of the family names associated with the success stories. There are arguments that family business names aren’t nearly as successful as most people believe.
Choosing a unique business name could be better for family run businesses
According to branding specialists Novanym, using unique business names can be far more effective than a family name. They state that when setting up a business, you have a number of branding options and using your last name sets you down and narrow and predictable path. They go on to say that “whilst some say using a family name evokes trust, people-contact and client focus, it’s forgettable, limiting and complicated.”
Their argument is supported by some of the world’s biggest family-run businesses, who have shunned their lineage for something far more catchy. According to the Credit Suisse Global Family 900 universe, a study on the largest, family-run businesses in the world, only one business in the world’s top ten (Kinder Morgan) uses a family name. Other businesses include Nike, owned by the Knight family, Wal-Mart, owned by the Waltons, and Novatis, ran by the Sandoz family.
One of those businesses, Wal-Mart, is now one of the largest and well-known businesses in the world. The chain of superstores was once just one market in Arkansas run by Sam Walton and named Waltons. However, in the early 1960’s, they changed the name to a more interesting and memorable name, Wal-Mart.
Wal-Mart—a portmanteau of the word Walton and Market, manages to be both a unique business name and pay homage to the family. Although the name is inspired by the Walton name, the truth is that when they first swapped names they were a two store business, and today they are the biggest company in the world by revenue, employing over 2,000,000 people.
But businesses prefer using the family name
Despite the numerous arguments against family names, many consider a family name a bonus. An article for Forbes, states that “The family business’s name can be instrumental in winning the trust and allegiance of stakeholders. It can also be crucially important in maintaining the solidarity of the family and the company.”.
In a survey of 336 C-level family members of family businesses, seven out of ten reported that their family name was very important to the current and future success of the company. Using a family name, according to the report, can result in better business practices.
But are family name businesses actually more trustworthy? Daniel Geltrude, Managing Partner of Geltrude & Company, the business who carried out the survey, thinks so. He states that “With their names on the door, family members have often made it part of the culture of their companies to be extremely dedicated, going above and beyond everyone’s expectations.” It is possible, however, that Mr Geltrude may be biased when it comes to judging the value of using the family name.
Family names can be more valuable for certain industries
Whether or not you want a creative and unique business name, or are content with using the family name, one thing is for certain; family businesses aren’t going anywhere. Family businesses account for between 65 to 80% of all European companies.
Using family names can genuinely benefit some businesses. For example, tailors are one area where family names are usually favoured. Founder of formal menswear company Charles Tyrwhitt, Nick Wheeler, named his business after his middle names to fit in with the tradition of having trustworthy and relatable names in the industry.
Nick Wheeler told CNBC in 2014 that “In clothes, traditionally what you would have done is go to your tailor or go to your shirtmaker. The name above the door was the name of the person in the shop.” Even huge businesses and meant to sound like an individual tailor, evoking in the consumer’s mind a small, family business, even when in reality they are huge money-making organisations.