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CREATING YOUR FASHION BRAND: THE BRAND NAME & LEGAL STRUCTURE
In 2014, almost a decade ago, I embarked on a journey to create my own fashion brand. Surprisingly, the inspiration for this venture didn't stem from my own desire to be an entrepreneur but was initiated by my former boyfriend, who strongly believed in the power of networking. Instead of discussing recent encounters with interesting people or the latest happenings in Berlin, he saw an opportunity. "Anna," he said, "we need to capitalize on this network. The power of business lies in collaboration among great people." Initially skeptical, I decided to give it a shot, and that's how the idea took shape: create one strong product, share it with notable people in Berlin, document their experiences, and let word-of-mouth work its magic. At least, that was the initial concept idea, although it naturally evolved in a different direction.
Our brand identity was represented by a simple black dot, and the brand name was a combination of our first names. Today, I'd like to introduce you to two crucial aspects to consider when starting your own fashion brand: No 1. selecting the right brand name and no. 2 choosing the right legal business form.
BRAND NAME MATTERS
When defining a brand name for a new business, it's crucial to consider some factors to ensure that your brand name is legally sound, culturally appropriate, and marketable.
1. Cultural and Linguistic Nuances: Ensure your brand name doesn't carry negative connotations in other languages or cultures. I am sure you certainly want to avoid unintentionally causing offense to potential customers with your brand.
2. Trademark Search: Before finalizing your brand name, conduct a thorough trademark search to confirm that it isn't already in use by another business. Visit this link (https://register.dpma.de/DPMAregister/marke/basis) to check existing trademarks in your intended field.
3. Social Media Presence: Check if your chosen brand name is available and not already in use on social media platforms. Consistency across all online channels is crucial for brand recognition.
4. Domain Availability: Ensure a domain name is available for your brand. An online presence that matches your brand name is essential.
5. Legal Requirements: Depending on your chosen business structure (e.g., GmbH or GbR), there may be specific requirements associated with registering your brand name. Ensure compliance with these regulations.
Selecting the right brand name is pivotal in avoiding future legal issues and costs. Take your time, conduct thorough research, and register your brand in the areas and countries where you plan to sell your products.
CHOOSING THE LEGAL BUSINESS FORM
Another critical early decision is determining the legal structure for your brand. Several factors should guide your choice, including your business's nature, financial situation, and liability preferences.
Advantages of a GbR:
Simplicity: GbRs involve minimal formalities and administrative requirements, making them straightforward to set up and operate.
Low Initial Costs & No Capital Requirement: GbRs require fewer financial resources and do not require a minimum capital investment, ideal for entrepreneurs with limited funds.
Tax Efficiency: GbRs don't pay income tax. Instead, the profits and losses can be reported on the personal tax declaration. This can lead to tax efficiency, especially when there are losses in the beginning it can be offset against your personal income sources.
Ease of Exit and Dissolution: Exiting partners can do so with ease, and dissolving a GbR involves fewer legal procedures.
However, GbRs come with personal liability and may lack the credibility associated with a GmbH. A GmbH often enjoys a more favorable reputation, making it a preferred choice when seeking external investors or dealing with specific stakeholders.
In our case, we opted for a GbR. Directly in the beginning we leveraged collaborations to generate immediate cash flow and enhance brand visibility. In my next blog article, I' am happy to share some magic ingredients for successful collaborations. Stay tuned!