Having a good logo — one that is simple but elegant, and identifiable but a little bit intriguing or mysterious — is essential to your business.

Think about some of these logos: Apple, Nike, Target, or McDonald’s.

They can probably instantly pop into your mind, right? As a result, they don’t even need any associated words! It’s extremely powerful in terms of branding, especially when considering that the human brain processes visual cues 60,000x faster than text cues. Additionally: an eight year-old child can match logos to products with 100% accuracy, but may not be able to read an entire mission statement. If you’re trying to resonate for a potential consumer from a point in early life, your logo is crucial.

Your logo has a few core functions for your business, including:

• It helps to create your image
• It’s tied to customer loyalty
• It’s a powerful marketing tool
• It helps to establish ownership

Focus on the second bullet for a second. Now look at this chart:

It’s from this article on Harvard Business Review, and the central takeaway is that customer relationships — driven by customer loyalty — are becoming the most valuable aspect of business these days. A logo as part of “brand value” is important, of course — but a logo as a function and driver of customer loyalty is crucial to your company.

If your company is going to engage in any form of product customization, having identifiable logos for specific brands is important — per research from Bain Capital. Think of a company like General Mills. It has one major logo, as seen here:

But it also produces a variety of specific sub-brands, including Betty Crocker, Cheerios, Totino’s, and more. All of those brands have their own logos and help distinguish the product on shelves and in the eyes of customers.

Now, it is true that Nike paid only $35 for the iconic swoosh logo — but in general, logo design can be expensive. (Some have even used the term “so expensive.”) There’s a logic to the price point, however: your logo is going to be the visual that customers and clients most associate with your brand, and the amount of impressions it might record in a day or week is astronomical.

Entire sections of bookstores have been written about how to design excellent logos, but the four major logo fundamentals are:

• Simplicity
• Versatility
• Relevancy
• Artistry

The last bullet point is what most people focus on — elements such as font, color, icon, and placement — but all four ideas are important. Research from Stanford University, for example, has shown that simplicity is the greatest competitive advantage in modern business. Why not have a customer’s first interaction with your brand be simple and elegant?

Versatility is also important in an increasingly mobile and digital world. Many logos are designed with print or a larger-scale medium in mind. But how will that logo look in a mobile context? Or, how would it look if the background was flipped from black to white? These are questions to consider, because consumers will interact with your brand (and hence your logo) in a variety of contexts relative to device used.

Relevancy means that your logo needs to be aligned to business objectives. For example, if you manage a honky tonk bar, your logo needs to have a guitar or some other icon within it that conveys the type of bar it is. You wouldn’t want someone to see the logo and come in expecting a four-course wine dinner. And, right there? That’s the power of the logo. It can set expectations and help people derive context about the brand they’re about to interact with.

If you’re planning on starting a business, you are probably juggling a million different balls in the air. Your logo might seem like only one of them. Hire a design firm and get it done, right? Wrong. It’s an important decision that needs to be considered carefully. Would Nike be as successful without the swoosh? Maybe, but the resonance might be a lot less. Would Target compete with Wal-Mart without the bullseye? Perhaps, but someone driving might not see it and instantly know to pull in.

Logos are an essential part of how you present and market yourself to the world. Doing it right, and understanding the fundamentals, is crucial to your future business growth.