In today's world of cheap and fast design work, you can get your company a logo for almost next to nothing. It is true that you might get lucky with an inexpensive crowd-sourced design, but there are huge downfalls to this method that many entrepreneurs are ignorant to at the beginning stages of building their brand and identity.
A logo can look visually appealing, but is that all a logo needs to be? It might be colourful, detailed and eye-catching but a logo needs much more than that.
A great logo needs to be memorable of course, it needs to stick in the mind of a consumer. Too many details and the consumer is likely to forget them. Think the nike 'swoosh'. We must note however–simple is good, but simplicity is not the ultimate goal, it is according to Paul Rand (American art director and graphic designer) "the by-product of a good idea and modest expectations".
With respect to colour–A logo designer should be able to convey the subject-matter and identity of the business in monochrome fashion. Pros will start with black and only black when designing, and only when the shape and form of the logo is finished will they move on to the colour phase. 1 or 2 colours are most common but 3 is OK, 4 colours in a logo should be the maximum.
Scaleability is a major major point of great logo design and an often overlooked one. Take your logo, print it out at very small sizes. Does it maintain it's integrity at this size? It should, it really should. A great logo looks as recognizable on a billboard as it does on a pen.
A logo of course should be relevant to the business it represents, but it doesn't have to be a literal representation. The nike swoosh is not a shoe or an article of clothing, it is a representation of an ideal of the company.