APRIL 15, 2013When Cindy Hounsell founded the Washington D.C.-based Women’s Institute for a Secure Retirement (WISER

) in 1996, she needed an eye-catching logo to brand the nonprofit business and appeal to her target market. She hired a graphic designer to help create a visual representation of her vision.“Given that my market is women planning retirement, I needed a logo that would make clients feel like things would work out financially and they’d become wiser in the process,” says Hounsell, who still gets compliments on the logo.

“Showing a woman under a tree reading works well on various levels,” she says. “The logo communicates she has the leisure time to read, the book suggests education, and the large tree shelters her, indicating that it’s possible to build up a retirement nest egg so she can spend her days relaxing.”

Such effective company packaging through a well-crafted logo is a powerful sales tool for the small-business owner, helping a company stand out in a crowded marketplace and building name recognition, says Mary A. Pettigrew, principal of ampersand graphic design, inc.

, whose tagline, “communications with a conscience,” evolved from the fact that many of ampersand’s clients are from the not-for-profit world.”Logos are so important that large companies spend $30,000 to $100,000 or more creating them,” Pettigrew says. “Entrepreneurs certainly don’t have to spend that much, but they do need an effective logo. The reality is that in the last decade, communications have become extremely colorful and eye-catching, and if you don’t create an attractive logo, potential customers will pass you by.”

Keep the following tips in mind when creating a powerful company logo that builds your brand.

Take Your Time

While you probably don’t have the hours or resources to conduct multiple focus groups to research your logo like large companies do, it is in your best interest to devote some time to the development phase.

“Chances are you’ve thought a lot about your mission statement and who your customers are,” Pettigrew says. “Use that information to come up with a logo that subliminally portrays your mission statement.”

To do this, she suggests coming up with words you want to associate with your business. “Think of feelings you want to portray, like strong, secure, fast and reliable,” she says. “A good designer can take such intangibles and use them to create a logo.”

RELATED: How to Get Customers to Remember Your Brand

Develop a Tagline

In conjunction with your logo, devise a tagline that sums up your services, which can also be incorporated into a logo. “For instance, your tagline might mention critical deliverables, such as the fact that your company is trustworthy and offers security, which is something you want to communicate in the logo,” she says.

Good taglines tend to run three to seven words and succinctly sum up the company’s services and attributes, while also augmenting the logo itself. Think Nike’s “Just Do It” and YP’s (formerly Yellow Pages’) “Let Your Fingers Do the Walking.”

Consider Color

Color creates an often subliminal emotional response, so it’s important to choose your logo hues carefully. People respond to colors differently, which is why stop signs are red. While this may be a good accent color, you generally don’t want an all red logo, as that can be off-putting. Greens and blues, on the other hand, are more approachable and assuring.

RELATED: 7 Cheap Ways to Brand Your Small Business

Work with Letters

The best logos are deceptively simple. “To create something memorable and unique, consider using your logo letters to convey your message,” says Pettigrew, whose own logo incorporates the ampersand symbol into her name in place of the “e.” “FedEx does a superb job of using lettering,” she says of what is considered one of the best logos of all time. The E and X at the end of FedEx are merged together and the negative white space created by the merging produces an arrow.

What to Avoid

The best logos, like Apple and Volkswagen, use original artwork, Pettigrew says, so “avoid clip-art, which looks cheesy.”

Also avoid using a logo that features an image with no meaning. “A logo is more than a pretty face,” she says. “Just because an image looks cool doesn’t mean that it’s going to work for your business. It’s important that people see the logo and know what you’re selling.”

Don’t create a busy or half-baked logo. “Firefox is busy and Wikipedia doesn’t work well either,” she says. “Verizon’s logo doesn’t show much creativity or even resolution; it seems like a work in progress.”

Finally, whatever you do, avoid creating a logo with an unintended double meaning. You want to get the attention of customers—not shock them.

Get more marketing tips and advice. Check out these marketing articles.

A freelancer since 1985, Julie Bawden-Davis has written for many publications, including Entrepreneur, Better Homes & Gardens and Family Circle. Julie blogs via Contently.com.

Photo: Getty Images