Somebody on Fiverr will sell you a logo for £20. A Manchester agency quoted a client of mine £6,500 for roughly the same deliverable. Both invoices say "logo design". They are not the same product.
The £20 version is a template with your name typed into it. You'll see the same mark on a dog groomer in Ohio and a courier firm in Lagos. Nothing was designed; something was searched for. If your business is a weekend market stall, honestly, that might be all you need.
Around £300–£800 you get an actual designer thinking about your actual business. Sketches. A couple of directions. Files that work in print, not just on screen. This is where most small businesses should be spending, and it's where corners get cut most often — ask to see the black-and-white version. A logo that only works in full colour will fall apart on an embroidered polo and cost you more later.
Beyond £2,000 you're paying for research, competitor mapping, brand guidelines, and someone senior staying on the project rather than handing it to a junior after the pitch. Worth it when there's real money riding on the brand. Wasted when there isn't yet.
The mistake I see weekly: a business spends £4,000 on shop fit and £50 on the logo that goes above the door. The sign is the most expensive place your logo will ever appear. Design it before you build around it.
My rule: pay enough that a person thought about your business specifically, on their own file, from a blank page. Below that price, nobody did.