Seven Biggest Mistakes in Setting Prices

Written by Brad Sugars of entrepreneur.com.

One of the biggest challenges for any business is pricing.

This applies not only to a start-up, but also to well-established businesses, especially those in lower-margin, highly competitive industries. The common theme with most pricing issues is risk: risk setting prices too high and you may push potential customers away; risk setting prices too low and you cut profits.

This "pricing paradox" drives most owners to default to discounting. However, risk in most cases can be eliminated by getting better information. Generally, the more you know, the less risk you perceive. From that perspective, pricing is all about getting as much information as you can about your market, your customers and your own internal numbers that drive your profit....