Adobe Photoshop Elements, though billed as photo editing software for amateurs, is surprisingly powerful. Highly recommended, it costs a fraction of the price of Photoshop. Using either app for a tiny image may be rather like using a sledgehammer to crack a hazel nut, but if you have a Photoshop handy, why not?
1. MAKE A NEW PICTURE. In Photoshop, select File - New. For very small images, make sure you know the exact pixel dimensions.
For a favicon icon you will need an image 16 x 16 pixels, RGB color, transparent.
2. MAGNIFY YOUR SCREEN. Open the Navigator toolbar and zoom up the image further by repeatedly clicking the double triangle icon at the right end of the slider. Increase the magnification to several hundred percent.
3. DRAW WITH A ONE-PIXEL PENCIL. Go to the toolbox and select the Pencil tool. Make it one pixel.
4. CHOOSE YOUR COLOUR. Tip: You'll find the little background/foreground switching arrows next to the colour indicator useful when you're working on a tiny image. You can switch to the background colour for quick erasing.
You may find it clumsy at first to dot your image down on this zoomed-up mosaic, but it does get easier with practice!
You can make a cutout shape if you want a .GIF or .PNG file, as these can have a transparent background.
If you're making a .JPEG, fill your whole square with colour before you start. JPEG images do not allow transparency.
.ICO icon files are not guaranteed to preserve transparency. Cutout shapes might have seemed like a good idea for a favicon. Certainly you can quickly recognise an outline. But a coloured square looks neater next to text, and stands out among other icons that are cutouts.
With a logo this size, you need to make the most of every pixel. Choose bright colours. After all, it's hard to be garish at the size of an undernourished coffee bean!
5. NOW DRAW, ERASE - AND PREVIEW YOUR IMAGE OFTEN AT 100%.
If you use the eraser in the Toolbox, make sure it's in Pencil erasing mode. Another way to erase is to go back a stage by clicking on a previous action in your History palette.
Avoid the temptation to add too much detail. (Not that you have much scope, but it is possible in the slightly larger sizes!) Viewed at tiny scale, you'll see that bold areas of plain colour work best.
7. SAVE when you're done. It's no longer necessary to save as an .ico file.