For this week, my Tip is: just keep your business name AS GENERIC AS POSSIBLE, yet still descriptive enough of the business we’re in. Also make it PROFESSIONAL-sounding. If you don’t have a sense of what “professional-sounding” is, just farm the web for ideas. Google “sell my note” or “note investors” and look at what your competitors are doing, paying special attention to their business names. Always EMULATE THE LEADER. Look at J. G. Wentworth, for example. They’re one of the more visible “cash flow investing” companies out there, and they do a big business specializing in buying structured settlements. Their name is generic. When in doubt, I would say you can’t go wrong by just using your individual name. “J.T. Smith”, for example. (Then, underneath the letterhead, explain what you CURRENTLY do, i.e., funding this or that.) That way, if you decide later on to sell something completely unrelated (i.e., tiddlywinks, widgets, etc), you won’t have to change your corporate name and pay additional filing fees, etc.
For our business, though, I would still say my best choice would be something like “[ABC] Funding” because “funding” is descriptive yet you needn’t be confined to notes only down the line. It’s generic, it explains (in a rather broad sense, anyway) what you do, and it leaves room for expansion (that is, you can change the overall direction, or focus of the business without changing the name). Let’s back up for a second. I’ve heard some unbelievably bad ideas from first-time brokers as to the business name(s) they were considering. Probably the worst I ever heard was (and I’m paraphrasing here because I can’t remember the guy’s name, nor would I repeat it here if I did) something like “Joe Blow [insert your name here] Note Broker”. I kid you not. Wow. That is unbelievably bad (to say the least).
#1, would you want to do business with someone using a name like that? No, I’m sure. It has an incredibly “cheesy” sound to it. It certainly does not exude even the slightest degree of professionalism or cred. But, this is a real example that I’m sharing with you (because a real person that had definitely made the decision to start this business was actually considering a name like this, and thankfully, I stopped him when he asked my opinion) and I’ve got to believe there are tons of other people who are stuck on the “naming” step (and the name you choose is VERY important, so you definitely SHOULD take your time with this initial step) who are otherwise inherently talented in other critical areas that will give them an edge going forward.
I was one of those stuck for a while on the “naming” step back in the day, but, luckily, the internet was brand new back then when I started my business, and I was a note investor with partners and the domain name “Note Investors” was available (it was easy for me to think of that name) and just snap it up. It explains what I do in a nutshell. But, these days, brainstorming a company name is not so simple or easy. Most every “generic’ domain name has been taken, so you’ve got to be innovative.
(BTW, when considering a name, always check the domain name availability on a site like NetworkSolutions.com or Register.com to ensure that no one else has it. If you eventually want to incorporate down the line and you then discover that someone else has the name you want, there are modifications you can make on the corporate name itself but you MUST initially snap up the actual domain name that you want ASAP.)
So, for a broker just starting out today (is this you?) who may ultimately want to branch out into other areas aside from straight brokering (i.e., investing for your own account, investing with partners, or even hard money lending– and that might even be thinking REALLY long-term, but I digress) I would go with something generic and professional, such as (and again I cite the example above) “ABC Funding”.
Why? First, it leaves you room to shift your direction (what if you start out brokering privately-held notes but eventually develop an affinity for factoring, business notes, even financial management of some kind or whatever, in which case you might want to choose something like “ABC Partners” or “Integrity Financial”, etc, etc.?), and secondly it allows you to start other businesses under that corporate umbrella in which case all you would need for that additional sub-business spinoff is a DBA name (“doing business as’), allowing you to file your taxes under a single name or entity (your “umbrella” corporate name) and for small, 1-2 person operations, I would recommend the LLC structure for a number of reasons, not the least of which being the ability to file your taxes under your personal name where the business profit/loss “flows through” to your individual tax return, but that’s a subject for another day.
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