The Biggest Branding Mistake Small Businesses Make

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Whether you’re just starting a new small business or you’re already a successful small business owner, it’s very possible that you’re about to make (or you’ve already made) biggest branding mistake.

Don’t feel bad. You’re not alone, but it’s a mistake you should definitely fix as soon as possible because it could destroy your business.

I’m talking about your business name. If you’re using your business name to promote and sell your products and services in the marketplace, then that business name is also a brand name. That means it serves two purposes and needs to be registered in two different ways – as a trade name and a trademark.

Trade Name vs. Trademark — What’s the Difference?

In simplest terms, a trade name is the name used to register your business to operate in your state. It’s the name used on your bank accounts, tax returns, and other official documents. However, just because you’re able to use your business name as a trade name doesn’t mean that you can use it in the marketplace as a brand.

To use your business’ trade name to sell and promote your products and services in commerce, you need to make sure that no one else is already using that name in a manner which could be considered confusingly similar to consumers.

The only way to ensure that the name is clear for you to use in commerce is to do a comprehensive trademark search. Such a search will determine whether or not potentially conflicting marks are already in use. Importantly, a comprehensive trademark search will find conflicting marks whether or not they’ve been registered as trademarks. This is critical because even if another company hasn’t registered the mark, if they used it first, they have common law rights to it under trademark laws.

Trademark laws were created to protect consumers by eliminating confusion about the company selling specific products and services. A trademark, when registered with the U.S. Patent and Trademark Office, gives you the exclusive right to use your business name in commerce. If another company starts to use the same (or a confusingly similar) brand name to sell products and services like yours, you can stop them from using that name.

Bottom-line, a trademark is completely different than a trade name, and your small business needs both.

What Should a Small Business Do?

The onus is on you, the business owner, to make sure that your trade name isn’t conflicting with any existing trademarks. This is a critical step in building a business and a brand that so many small businesses skip, and the risk is huge. Often, a trademark infringement can be so expensive to recover from that small businesses have to close their doors, but it’s something that never has to happen.

Don’t become another small business disaster story. Make sure you clear your trade name in order to do business in your state and clear your business name as your brand identity by ensuring it doesn’t conflict with any existing marks that are already in use in commerce.

If a comprehensive trademark search reveals that your business name is clear from conflicts, apply for federal trademark protection so you can easily enforce your rights to that name in the future. What you pay to search and register your trademark today is thousands and thousands (possibly millions) of dollars less than fighting a trademark infringement and ultimately being forced to re-brand will cost.

Trademark Photo via Shutterstock

This article, “The Biggest Branding Mistake Small Businesses Make” was first published on Small Business Trends

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