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Your business logo is a small portion of your business's brand identity. It should reflect elements like your company mission and the experience you hope to create for customers. — Getty Images/Delmaine Donson

At a certain point in your business lifecycle, yes, you need a logo to represent your brand. Logos help customers recognize and remember your business, creating opportunities to trigger engagement and keep your company top of mind the next time a customer is searching for your product or service.

However, before spending money to design a logo, consider the following caveats.

Logos do not replace your brand identity

While a logo can come to represent your brand, it doesn't replace the work of building a unique brand identity that connects with customers.

"Your logo is not your brand. Your brand is the experience your customers have and then tell their friends about. All the design craft in the world can't make a logo that can convince someone your product or service is great if it isn't," wrote Fast Company.

A brand identity is made of a few different elements, including typography, imagery, a color palette, values, and tone of voice. Logos fall under brand identity, but they can't do all the work of communicating what your business stands for.

[Read more: 7 Elements of a Great Business Logo]

Logos cannot overcome a poor customer experience

Unfortunately, the first customer interaction you have with someone could be your last — no matter what your logo looks like. More than half of consumers say they would stop using a brand after just one bad experience, according to ZDNet. If the customer experience doesn't meet someone's expectations, the design of your logo won't matter.

"No one cares that your airline logo has been crafted out of unicorn tears and your visual language is AI-generated if their flight keeps getting cancelled or they get involuntarily de-boarded because you overbooked the flight," wrote Fast Company.

New businesses should focus on nailing the customer experience before spending big on a logo design.

[Read more: 4 Important Elements of a Successful Business Logo]

Your logo is not your brand. Your brand is the experience your customers have and then tell their friends about. All the design craft in the world can't make a logo that can convince someone your product or service is great if it isn't.

Fast Company

Logos build credibility

A well-designed logo signifies professionalism, portraying a brand as established and trustworthy. Especially for new businesses, logos help build authority, memorability, and recognition. Consistent use of a logo across marketing materials and platforms builds familiarity and can strengthen the association between the logo and the brand's values.

Even freelancers and sole proprietors can benefit from a logo. Solo professionals can use a logo to signify experience and expertise in their particular area. Consider using a logo to make your business look solid and well established.

Logos should be updated periodically

There are a few natural points in a business's life cycle when it makes sense to update your logo. For instance, consider redesigning your logo after acquiring or merging with another company to form a new brand.

Here are a few other instances when you might update your logo:

  • The logo style looks dated and feels stale.
  • The original logo is too complex.
  • Your business is expanding into a new sector.
  • Your logo no longer stands out compared to those of your competitors.

If you anticipate your business scaling quickly, joining a larger enterprise, or evolving into a new product area, consider using a simple logo design or a letterhead logo (using your business name). These options can give you the benefits of brand recognition without the labor required to find the perfect logo.

Logos don't have to be literal

Again, there's only so much a logo can do to represent your company. If you're hoping to distill what your company does or makes into a simple icon, you may be overestimating the need for a logo.

"The McDonald's golden arches do not represent hamburgers. Apple's partially-eaten apple does not indicate computers or smartphones. Target's bullseye does not communicate a great retail experience," wrote Wong Digital, a B2B branding agency.

Ultimately, logos are the cherry on top of a brand identity sundae. Your company's mission; creating typography, color, and image guidelines; and the experience you design for your customers are all more important elements than a simple logo. And while you need a logo to convey credibility, be aware that this logo can (and should) change over time.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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