Related or Different Naming Scheme

[Steve B]

I've decided to grow my business by adding some new services that are unrelated to my original business (underground dog fences). As I add these new services I want to give them their own business names (actually they will all be DBA's under the Derby's Enterprises LLC). The question is, should I take advantage of my reputation and name recognition that I have created by keeping the new company names similar to the first (i.e. Derby's Lawn Service, or Derby's Pressure Washing). Or, should I give them totally unrelated names to avoid customers seeing us as a Jack of all Trades. Incidentally, Derby is the name of my dog, but I also live near "Derby" city, so it has some built in name recognition in this area.

My current thoughts:

Short term, I will benefit from the immediate name recognition and will benefit when I market to my existing customers. Selling additional services to the customers that already trust me is a primary motivation for adding these services. With the fence business I do not get repeat business, so I wanted to find a way to utlilize my customer base. I will also offer these new services to any new customers I get. "I'm glad you are happy that we have done a great job keeping your dog safe, would you be interested in having your gutters cleaned?"

Long term, I am worried that it will change the perception that we are experts in any of the businesses. I know big companies can pull it off (being experts in many things), but when they see the same employee doing completely different functions I just wonder how that will look. Also, one of my new services may be something that I will want to franchise - so I might want a more creative name that will work better in other parts of the country also.

Any thoughts on how to proceed will be appreciated.

[Business Attorney]

My reaction is to get a new name that works for the new business, for all the reasons that you point out.

I think any short term benefit of using the Derby name with existing customers is minimal. Since they are existing customers, you will have the ability to specifically point out the connection when you are contacting them. The name of the business wouldn't necessarily even do that, both because of the name of the nearby city and the fact that in Kentucky, Derby is not all that uncommon because of that little event held in May each year.

If you want people to make the connection, add "a Derby's Enterprises LLC company" someplace on your materials.

[KristineS]

If the businesses were natural extensions of each other, i.e. dog walking or dog training, then I could see wanting to piggyback on the existing name. Since they're not, I'd advise going for something completely different.

If you want to capture additional business from current customers, you can just mention that you also offer these other services through another company. I think if you try to tie all the names together you will end up sounding like a jack of all trades.

[KristineS]

If you want people to make the connection, add "a Derby's Enterprises LLC company" someplace on your materials.

I like this idea. We recently did something similar with one of our new companies and it does open us up to piggybacking a bit on the parent company's existing reputation. It doesn't have to be big or showy, but it does lend a little legitimacy.

[Steve B]

You made good points. I've switched the name of my next venture to E.S.P. - Home Services.

You're right, when I'm marketing to my Derby's Pet Fence customers I'll make it more prominent that it is a division of Derby's Enterprises LLC. For my general marketing material that point will be made, but less prominently and at the bottom.

[seolman]

Hi Steve - were these just examples (i.e. pressure washing) or are these the actual business you are thinking about setting up? Can you give us a bit more detail? Sometimes it's not a bad idea to piggyback on what you have for a while (same web site etc) while it get started and save some marketing costs while you get it off the ground then spin it off when it gets to the point it's ready to stand on it's own feet.

Sometimes businesses that seem non-related are actually related from a marketing perspective. Pressure washing and pet fences can both be sold to home owners. So can gutter cleaning. etc..

That's why I was wondering if these were the real businesses you were considering setting up.

[Steve B]

They were just examples. The actual new businesses, so far, will all share the same market. That is part of my motivation. I have a fairly lengthy list of homeowners who have been willing and able to pay someone for a service for their home. These people have a very high trust factor in my current business (and me) and are willing to pay a professional to get something done correctly. Marketing to them for other services could prove to be very efficient. In addition, all of my future marketing will be able to take advantage of the same effort (I can put two or three flyers in the same mailboxes, negotiate better deals on advertising, buy one mailing list for all the businesses etc.).

The other business ideas so far are Landscape Lighting and Home Handyman services. I've also considered a few landscaping related services (lawn aeration, fertilizing, weed control). I need to be careful not to appear to be a Jack of all Trades. I think that will be easier as each service grows and I can hire an expert for each one. But, in the beginning it will be me and a couple part-time employees handling it all.

The downside is that all of these services rely on people having jobs and disposable income - not the best economy to be starting these services. But, that just makes the efficiency that much more important.

[Steve B]

Incidentally, I decided to use a different naming scheme. I'm calling it E.S.P. Home Services. Our focus will be on things that save Energy, increase Safety, and Prevent problems.

Hopefully, I will create a second income stream to supplement my core business. It will help offset the seasonality of the fence business also.

[billbenson]

Just a comment on the yard care idea. I think the bulk of the home owners in florida use a lawn service. I pay $70 per month for lawn care. Same guy mows the whole block. Retiree in the neighborhood. I think he does it because he's bored. He's gotta be 70, goes for power walks in the morning and at night, mows lawns, and walks his dog. He looks fat, I don't know how he could be.

I also use truegreen which used to be Chemlawn to treat the lawn. They come out about every 6 weeks and charge about $50 per treatment. They made a radical improvement in the lawn compared to when I was putting down fertilizer though.

I have a well for irrigation. Its a deep well (more than 15') which you would need in KY I would assume. I fix my own sprinkler heads, but have a guy that has been doing sprinkler system repair since the dawn of time for things like well pump repair.

I only mention it because you mentioned lawncare in your post. Truegreen is always calling me with a hard sell for services like lawn airation. Right now, thats a hard sell. Florida is a different environment. Aging population and warm weather year around more or less. Also a non union state and a good percentage of the lawn care people are illegal immigrants. I'd be very careful going into the lawn care direction although sprinkler systems and wells may make a lot of sense as it's very similar to what you do today (burying cable vs burying pvc pipes).

Just a thought, from the consumer side of the fence (no pun intended).

[Evan]

Perhaps a bit late, but I'd agree with all the other input.

If your services were generally related, I'd say using the same name would be beneficial as it links everything. If it's different, it's probably best to establish a totally different name. Think of parent companies like Yum! Brands. If you liked Taco Bell, but not Pizza Hut, it probably wouldn't be a good idea to advertise they're part of the same company. So in this case, the different "names" are a good thing.

Dell has many different subsidiaries. One really for each of the different products, but they're all related. (Don't sleep because it's accounting-related) There are some companies that offer similar services under the same name as well... even though not quite the same. For example, Deloitte & Touche USA LLP has four subsidiaries: Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, and Deloitte Tax LLP. This is very common amongst large accounting firms.

[Steve B]

I got my rack cards in the mail yesterday (thanks Remipub - they came out great and that was really fast service). I'm going to start putting them in newspaper boxes later this morning.

With a different name noboby will know it's the Derby's Pet Fence guy (which is good in most cases) - but, I can specifically make a point of telling my existing customers if I want to. So, I can have it both ways.

I sent an e-mail to my current customers and generated a little interest but no sales yet. Hopefully, this business will generate a little extra income this winter! I have a few fence jobs lined up, but the weather isn't letting me get them in. This new business is counter cyclical and counter weathercal (if you start hearing that word in the future - remember you heard it here first).

[billbenson]

Did you use the same phone number, Steve or how did you handle telephones for the different businesses?

[Steve B]

We have another phone (and phone #) that we have been keeping active for just such an occassion. My wife publishes a coupon magazine and every once in a while I'll run an ad in it just to see if there is any interest in a new business idea I may have. We didn't run an issue this month, so I had no easy way to try it out.

On the back of the rack card I put the two college basketball schedules (UK and U of L) - so I think the card should stick around the houses for a little while. I probably put out over a thousand this morning and I'm going back out to do more. I want to find out quickly if there will be any reaction to it. The nice thing is that I'm also putting out my Derby's Pet Fence rack cards at the same time.

[billbenson]

I've been trying to figure out how to deal with a second product line on the phone as a one man show. There was a thread a while back that recommended against this, but I try to portray myself as a large company, not a one man show. I'd loose a lot of business if they realized it was me sitting in a home office in a pair of shorts. It's really easy to answer the phone the wrong way if you are busy and supposed to be two companies.

I wonder if there aren't some fairly cheap pbx sort of systems that might help this out.

[Evan]

I wonder if there aren't some fairly cheap pbx sort of systems that might help this out.

Depends on your call volume. There are some available online options, such as Kall8, that would allow for you to cheaply have a second number. You could add this # to your phone so you know it's "XYZ Corp" and can then answer it as "XYZ Corp, how can I help you?" -- or as whatever you'd use for your business.