BANKELELE: Company names say a lot about the businesses - Daily Nation

Company names say a lot about the businesses

Wednesday July 18 2018

By BANKELELE
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A few years ago when Forbes Africa magazine awarded Equity Bank CEO James Mwangi with the 2012 African Entrepreneur of the Year Award in Nairobi, he said it was time for Africans, and particularly Kenyans, to celebrate wealth and success, not to be shy or hide about it.

Big money deals still happen today, many done by anonymous entrepreneurs using vague company names. People try to shroud their business interests for various reasons, such as not wanting to alert competitors, and fear of revealing business interests to creditors or even their own family members.

But perhaps bigger reasons for wanting to keep a low profile are that the tax collectors at the Kenya Revenue Authority (KRA) are also avid readers or the entrepreneurs may simply be engaging in businesses that they are not entitled to as influential government or business leaders with lucrative, but secret, side hustles.

When you go to the websites, if any, of many moderately successful companies, the “about this company” section is as vague as possible, with few names, certainly no details about shareholders. Instead, they tout the business expertise and products.

HIERARCHY OF NAMING

The mystery also extends into business names in which there is a hierarchy of naming, and by understanding company names, you may get an idea of what stage a company is in. So names are in Swahili or Maasai, or twists of certain fond names of places in rural villages or school dormitories or characters and places in the Bible or novels. They might have the family names, but then Kenyans are tribal and some make purchasing decisions based on business names. Also, using very long or complicated names for a company is not good, as it may lead to delayed payments as cheques may have to be sent back and corrected.

These names are for special companies that are meant to be promoted and hopefully sustained for many years, carefully moulded and managed, to be tax-compliant, to have proper licences, to have financial accounts, to be able to borrow funds, to be good citizens, to attract more capital and investors. They may be passed on to children as inheritance or to start foundations.

There is the adage about not putting all your eggs in one basket. And that is a reason for not using one name for different companies. If one company gets into trouble or industry circumstances change and an entrepreneur wants to get out of a business, he or she can easily sell out or close a company without hurting other businesses. But if all companies share the same name, then trouble in one can easily spread to others, and needlessly scare away customers.

UNIMAGINATIVE NAMES

Then there are the names used for hit-and-run operations. Supplier companies have names that are as general and generic as possible, short names with words like “China”, “Quality” and “Trading” – to process payments and then to be forgotten and deregistered after sufficient funds have passed through and been distributed. Take a look at the unimaginative names from the first NYS scandal – Reinforced Concrete, Roof and All, Braincraft, Mindful, Essential Prodigy, Critical Mass, Bright Thinking – and you picture someone being asked to quickly come up with company names to enable payments to be wired before the banks close.

It is also okay to change names, and a few people legally change their birth names every week. Companies also change their names and go through costly exercises, in which they hire branding consultants who test out numerous names and logos before decisions are made. A few years ago, ICDC Investments became Centum, Arthur Andersen became Accenture, and AIG’s investment arm changed to Pinebridge. There are sometimes hitches and companies have court battles over names, such as the owners of Westgate battling with the Japanese electronics giant over the use of the “Sony” name in Kenya, and now a company registered in Kenya in 2005 is battling with Barclays over the name “Absa”, to which Barclays is going to rebrand in 12 African countries, including Kenya.

Also, a few months ago the king of Swaziland surprisingly changed the name of his country to Eswatini. But today, stationery, signage, government agencies, properties and currency notes still bear the name Swaziland and it is estimated that it will cost $6 million for the new name to stick.

Twitter: @bankelele