Family names out of favour with small businesses

The number of small firms starting out with a family name over the door is in decline, according to research from Royal Mail. 41% of small businesses established before 1980 are named after a family name. That figure falls to only 14% among businesses established after 1995. Just 24% of small businesses (less than 300,000) have a family name today.

Younger companies are more likely to have a factual, product driven or even humorous name today than companies that have been trading longer. Results of the Royal Mail survey also revealed:

• 25% of small firms established prior to 1980 said their present company name is reflecting a product or service offering. That figure rises to 50% of small businesses established after 1995. Overall, 41% of small firms have ‘factual’ names
• 11% of those established before 1980 said their present company name is based on an anagram or play on words, compared with 16% of businesses established after 1995. Those firms account for 13% overall
• 2% of small firms established before 1980 said their present company name was humorous compared with 6% overall
• There are now approximately 200,000 small businesses with ’funny’ names in the UK

Royal Mail’s research revealed that the decline of the family names appears to be linked to modern marketing practices, particularly e-commerce. Small firms see making it immediately obvious what they do as more important than choosing a name that reflects family or local identity:

• 66% of people asked felt that the company name helps to market the business, and when asked why, 66% of them said this was because it explains what the business does
• Just 1% of those who felt their company name helps them market their business said it was because the name was a traditional family name or local name
• 48% of small firms trading over the internet have names reflecting a service/product offering compared to 37% of those not involved in e-commerce

• 47% of small businesses with websites have names reflecting their service/product offering compared to 34% of businesses without a website

Tim Rivett, Head of Small Business at Royal Mail, commented: “The name of a business plays an important role in creating the very crucial first impression of the business. Getting it right is therefore key."