Before you start designing a business card or picking colors for your letterhead, you need a logo. Featuring your company name and embellished with a little color and perhaps a few graphic touches here and there, your logo is the most important design element because it is the basis for all your other materials: stationery, packaging, promotional materials and signage.

"Through the use of color and graphics, your logo should reflect the overall image you want your company to convey," says Richard Gerstman, founder of Gerstman & Meyers, a brand identity and marketing consulting firm. "It should give people a feel for what your company is all about." For example, say your product is an organic facial cream you'll be marketing to health-conscious consumers. Your logo should represent your product's best benefits--being all-natural and environmentally sound. Creating a simple, no-nonsense logo using earth tones and a plain typeface will give the impression of a product that is "back to basics," which is exactly what you want to achieve. Take that same product and give it a slick, high-tech look with neon colors, however, and people won't associate your logo with the down-to-earth product you're selling.

Trying to create a logo on your own 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 alone. However, be aware 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 for all your promotional materials, so this is one area where spending a little more now really pays off later.

Excerpted from Start Your Own Business: The Only Start-Up Book You'll Ever Need , by Rieva Lesonsky and the Staff of Entrepreneur Magazine, © 1998 Entrepreneur Press
Entrepreneur Magazine - http://www.entrepreneur.com/article/0,4621,265062,00.html

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