August 21, 2017 | less than a minute read

The best names for companies

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Tom Elgar

Co-founder

Get in touch

Tom Elgar

Co-founder

I have often wondered why firms, and particularly professional services firms so often name their firms after their founders. Have they no imagination? Or are they uniquely self-regarding...?

Well the research suggests that when the founders put their name behind their firm it is significantly more likely to be successful. So all those law firms and accountancy firms were right all along!

Of course what is true of the founders is equally true of the experts. If you put your name behind your own communications you care a lot more and your customers know that too. See below.

After accounting for other factors, firms that bore their largest shareholder’s name enjoyed a return on assets (ROA) that was three percentage points higher than other companies. The authors explain this by noting that if you name a firm after yourself, you send a signal. You believe your product is good enough to stake your own reputation on it, not just that of your company. If you fail, you will remain personally connected to that failure for the rest of your career. The authors suggest that customers receive this signal and reward firms accordingly.