Your logo is a visual representation of everything your company stands for. Think of McDonald's golden arches or the Nike swoosh-these two impressive logos embody these companies well. But many companies still skimp on developing this key identity piece.

Ideally, your company logo enhances potential customers and partners' crucial first impression of your business. A good logo can build loyalty between your business and your customers, establish a brand identity, and provide the professional look of an established enterprise.

Consider Allstate's "good hands" logo. It immediately generates a warm feeling for the company, symbolizing care and trust. With a little thought and creativity, your logo can quickly and graphically express many positive attributes of your business, too.

Logo Types

There are basically three kinds of logos. Font-based logos consist primarily of a type treatment. The logos of IBM, Microsoft and Sony, for instance, use type treatments with a twist that makes them distinctive. Then there are logos that literally illustrate what a company does, such as when a house-painting company uses an illustration of a brush in its logo. And finally, there are abstract graphic symbols-such as Nike's swoosh-that become linked to a company's brand.

"Such a symbol is meaningless until your company can communicate to consumers what its underlying associations are," says Americus Reed II, a marketing professor at the University of Pennsylvania's Wharton School, who's conducted research on the triggers that lead consumers to identify with and become loyal to a brand. But building that mental bridge takes time and money. The Nike swoosh has no inherent meaning outside of what's been created over the years through savvy marketing efforts that have transformed the logo into an "identity cue" for an athletic lifestyle.

Growing businesses can rarely afford the millions of dollars and years of effort required to create these associations, so a logo that clearly illustrates what your company stands for or does may be a better choice. Even a type treatment of your company's name may be too generic, says Placitas, New Mexico, logo designer Gary Priester, principal of gwpriester.com, the Web arm of design firm The Black Point Group. Priester believes customers should be able to tell what you do just by looking at your logo.

Getting Started

Before you begin sketching, first articulate the message you want your logo to convey. Try writing a one-sentence image and mission statement to help focus your efforts. Stay true to this statement while creating your logo.

But that may not be enough to get you started. Here are some additional tactics and considerations that will help you create an appropriate company logo:

  • Look at the logos of other businesses in your industry. Do your competitors use solid, conservative images, or flashy graphics and type? Think about how you want to differentiate your logo from those of your competition.
  • Focus on your message. Decide what you want to communicate about your company. Does it have a distinct personality-serious or lighthearted? What makes it unique in relation to your competition? What's the nature of your current target audience? These elements should play an important role in the overall design or redesign.
  • Make it clean and functional. Your logo should work as well on a business card as on the side of a truck. A good logo should be scalable, easy to reproduce, memorable and distinctive. Icons are better than photographs, which may be indecipherable if enlarged or reduced significantly. And be sure to create a logo that can be reproduced in black and white so that it can be faxed, photocopied or used in a black-and-white ad as effectively as in color.
  • Your business name will affect your logo design. If your business name is "D.C. Jewelers," you may wish to use a classy, serif font to accent the letters (especially if your name features initials). For a company called "Lightning Bolt Printing," the logo might feature some creative implementation of-you guessed it-a lightning bolt.
  • Use your logo to illustrate your business's key benefit. The best logos make an immediate statement with a picture or illustration, not words. The "Lightning Bolt Printing" logo, for example, may need to convey the business benefit of "ultra-fast, guaranteed printing services." The lightning bolt image could be manipulated to suggest speed and assurance.
  • Don't use clip art. However tempting it may be, clip art can be copied too easily. Not only will original art make a more impressive statement about your company, but it'll set your business apart from others.
  • Avoid trendy looks. If you're redesigning your old logo, you run the risk of confusing customers-or worse, alienating them. One option is to make gradual logo changes. According to Priester, Quaker Oats modified the Quaker man on its package over a 10-year period to avoid undermining customer confidence. But don't plan to make multiple logo changes. Instead, choose a logo that will stay current for 10 to 20 years, perhaps longer. That's the mark of a good design. In fact, when Priester designs a logo, he expects never to see that client again.

Watch Your Colors

One thing you need to be careful of as you explore color options is cost. Your five-color logo may be gorgeous, but once it comes time to produce it on stationery, the price won't be so attractive. Nor will it work in mediums that only allow one or two colors. Try not to exceed three colors unless you decide it's absolutely necessary.

Your logo can appear on a variety of media: signage, advertising, stationery, delivery vehicles and packaging, to name just a few. Remember that some of those applications have production limitations. Make sure you do a color study. Look at your logo in one-, two- and three-color versions.

Hire a Designer

While brainstorming logo ideas by yourself is a crucial step in creating your business image, trying to create a logo completely on your own is a mistake. It may seem like the best way to avoid the high costs of going to a professional design firm, which will charge anywhere from $4,000 to $15,000 for a logo design. Be aware, however, that there are thousands of independent designers around who charge much less. According to Stan Evenson, founder of Evenson Design Group, entrepreneurs on a tight budget should shop around for a designer. "There are a lot of [freelance] designers who charge rates ranging from $15 to $150 per hour, based on their experience," he says.

But don't hire someone just because of their bargain price. Find a designer who's familiar with your field . . . and with your competition. If the cost still seems exorbitant, Evenson says, "remember that a good logo should last at least 10 years. If you look at the amortization of that cost over a 10-year period, it doesn't seem so bad."

Even if you have a good eye for color and a sense of what you want your logo to look like, you should still consult a professional designer. Why? They know whether or not a logo design will transfer easily into print or onto a sign, while you might come up with a beautiful design that can't be transferred or would cost too much money to be printed. Your logo is the foundation of all your promotional materials, so this is one area where spending a little more now can really pay off later.

Using and Protecting Your Logo

Once you've produced a logo that embodies your company's mission at a glance, make sure you trademark it to protect it from use by other companies. You can apply for a trademark at the U.S. Patent and Trademark Office Web site.

Then, once it's protected, use it everywhere you can-on business cards, stationery, letterhead, brochures, ads, your Web site and any other place where you mention your company name. This will help build your image, raise your company's visibility and, ideally, lead to more business.

Creating a logo sounds easy, doesn't it? It can be. Just remember to keep your customers and the nature of your business in mind when you put it all together. In time, you'll have succeeded in building equity in your trademark, and it will become a positive and recognizable symbol of your product or service.

Compiled from articles written by David Cotriss, Kim T. Gordon and Steve Nubie previously published on Entrepreneur.com, and from excerpts from Start Your Own Business .