I see this question countless times in Facebook groups. Probably because there’s no set answer and it’s a very tricky one to gauge.
Pepsi paid $1m for their logo redesign in 2008. They can pay that because of the value it provides to their company. It’s such a lucrative and important asset to their business that they were prepared to pay that much.
How much you spend needs to correlate with how much value you’re planning to get from the design. For example, if you’re planning on making £40k with your business next year, then I’m sure it seems reasonable to spend at least £2k to get your branding spot on to entice those customers and clients.
I only offer my logo designs alongside other branding elements such as colours, fonts and a brand manual. Because I think that a brand is so much more than just a logo, it’s the whole shebang – it creates an overall feeling, and has to look seamless with its surroundings. There’s no point in creating a beautiful logo if it’s going to be smushed next to a horrible typeface with totally the wrong colours!
Work out how much you’re planning on making with your newly redesigned business (if it’s well designed then it’s probable that your new branding will have a big impact on your goals!) and work out what proportion of it you’d be willing to spend to be the face of your brand. If your brand exists online, then remember that it’s the equivalent of your shop front!