Brand new business – staying smart

There is a growing trend, and in some cases, pressure for practitioners to consolidate and come together to create new partnerships and coalitions to deliver consultant services.

This movement towards formal collaboration and co-operation between practitioners is heralded as creating many opportunities; from reaping the benefits of shared services to becoming a more robust entity able to withstand more commercial competition.

One other opportunity which tends to be secondary on most practitioners’ “reasons to do this” list, is the ability to create a brand for the new venture, whatever legal form it may take.

A brand can significantly enhance a business’s value and can become a substantial business asset.  The right brand can reach out and touch your marketplace and convey whatever message you want, for example that your services are professional, high quality and have integrity.  Brand loyalty can transform a business.  Ideally the “consumer” will form an allegiance to your brand and the broader entity it represents, in addition to the individuals that make up the whole.  The proportion that a consultant’s value may increase by having an over-arching brand is estimated to be as much as 15% according to specialist accountants in Independent Practitioner;  a significant increase.

However, you need to get your branding right in order to maximise the potential value it brings and there are legal and commercial issues to consider:

  • Choosing the right brand. When setting up a new business you have the luxury of starting with a blank page for brand development. You aren’t having to re-engineer something that is already in place. However, choosing a brand that accurately reflects your business can be tricky. You may need to undertake market research or engage a marketing expert to understand properly what your brand could, and should, represent and how it should be developed.  Sometimes the most successful brands are those that are simple, for example the Nike “Swoosh”.  Single, meaningless words can also be very effective; think “Persil” or “Kleenex”.   Be careful you don’t choose a name that has a hidden or inappropriate meaning in another language or when used in a different context!
  • Brands have become increasingly sophisticated and are not restricted to logos, names and slogans. Designs, shapes of items, colours, smells, sounds and gestures can all be registered as trademarks in the UK.  For example, Heinz has registered its distinctive colour green in relation to baked beans and a tyre manufacturer has registered the smell of roses in relation to vehicle tyres!  So think broadly and creatively.
  • If you use a freelance designer or a brand development company it is important that there is a written contract which transfers all intellectual property in the brand created to the business.  It is not enough simply for the designer to have been paid for their work: a written “assignment” of rights is required otherwise you may end up with, at best, permission to use the work, but you will not own it.  If employees of your business create a brand in the course of their ordinary duties, then you can relax.  An employer owns those rights created by its employees automatically.
  • Don’t assume that just because you have never seen your chosen brand before, that someone else doesn’t already own it.  It is far more cost effective to carry out investigations at the start which enable you to avoid problematic brands, than it is to sort out a messy intellectual property dispute when you have already re-branded the whole business.   Basic checks online and of business directories can give an instant feel of who else might have an interest in shortlisted brands and give an indication of those from which it is best to steer clear.  One of the most effective ways of ascertaining whether your chosen brand may infringe someone else’s rights is to carry out a search of the trademark register at the UK Intellectual Property Office.  Professional “clearance” searches will give you a full risk profile, and indicate whether you are free to operate under your chosen brand, but you can carry out basic searches yourself to get an overview and rule out non-starters at www.gov.uk.
  • Protect your investment.  Once you have settled on your brand, consider registering it as a trademark.  In simple terms, a trademark is a sign used to differentiate one organisation’s goods and services from those of others.  Trademarks must be registered in relation to the goods and services with which you use them, so registrations for consultant businesses will usually be in class 44 which covers medical services.  It may be that there are other areas into which your practice ventures from time to time which may also be worth covering – training and education services is a common one.

The UK application process is relatively straight forward and an application can be made online.  Once submitted, your application is examined by the registry and third parties will also have an opportunity to oppose it, for example, if they believe they have an earlier registration which conflicts with your brand.  If, as in the majority of cases, no one objects, then the process usually takes around 4 months and your registration, once granted, is valid for 10 years and can be renewed indefinitely.

Once registered you have a monopoly over the use of that trademark in relation to the goods and services for which it is registered.  This means that you can take legal action against those who infringe your rights by using the brand without your consent.  You can also generate income by licensing your brand to allow others to use it (for example if you have ancillary services provided by third parties under your brand) or, you can sell it.  Without a trademark registration you must rely on trying to enforce your rights through copyright (if any exists) or “passing off” if your brand is misappropriated by others.  These are notoriously complicated, time consuming and expensive  legal remedies.  Passing off, for example, relies on you being able to show that you have an established reputation under your brand and that confusion is being caused by its misuse.  It is harder than you might think to prove that the public are confused!

  • Once registered as a trademark in the UK, you can use the ® with your brand in the UK.  Don’t do so before the registration is complete as this is a criminal offence.  Until the brand is registered you can use “TM” to show it is an unregistered brand over which you are claiming ownership.  You can also use TM in relation to other brands which you do not intend to register to put others on notice that they are also your property.
  • Create brand guidelines.  It is important, particularly if your brand is registered as a trademark or is licensed out to others, that your brand is used consistently in all media. Brand guidelines can help by prescribing the precise colour, dimensions, placing, font and other characteristics of your brand to ensure it retains its integrity and continues to be enforceable as a trademark.  On a number of occasions we have found that a brand owner has used  a brand in a completely different way to the form in which it is registered.  This is dangerous and can result in the loss of a trademark registration.
  • Consider registering domain names that include your brand. Register as many connotations with as many different top level domains (e.g. .net,  .com) as is commercially practical.  This can help to stop others from using your brand online and mitigate the risk of you becoming a victim of “cybersquatting” whereby you are held to ransom by the owner of a domain name which is relevant to your business.
  • If you are incorporating as an LLP or a limited company, then in the course of creating your business you will also register a business name at Companies House.  This does not need to be the same as your brand.  It is also worth bearing in mind that registering a name at Companies House does not give you any rights over that name other than preventing anyone else from registering another company or LLP with an identical name.
  • Achieving brand success and brand loyalty requires investment. Gaining appropriate intellectual property protection is one way of protecting your investment, but if your rights are challenged or infringed then you should also be prepared to defend them.  IP litigation can be expensive and is a distraction from your core business and so obtaining IP insurance is something you should consider.  Having insurance can give you the comfort that if you do end up in a contentious situation you will be able to deal with it with the appropriate expertise and financial backing.

After all, why invest in creating enhanced value through your brand if you are not able to maintain it!

Hopefully your branding exercise will be a success.  You will have a distinctive brand which is instantly recognisable by Trusts and other “customers”.  It will be effective in conveying the message that you want and positively reflect the organisation you have become.  But unless you protect it properly from the outset, you could suffer the frustration (and financial loss) of all your hard work being picked up by someone else!