Three Mistakes: When Pricing Your Products

Setting prices takes a very steady hand: Reach too high and customers will walk; sink too low and you'll barely make rent.

Most small companies get pricing wrong, says Russell Chapman, a partner at Acclaro Partners, a management advisory firm that works with companies with $30 million to $300 million in annual revenues. Chapman usually jumps in when a company runs into trouble or there's been an acquisition.

Inappropriate pricing is rarely the sole reason a company fails, says Chapman, but it's one of the more common problems, particularly among entrepreneurs juggling a bevy of issues. Ultimately, the firms that get it wrong tend not grow as fast as they should.

When it comes to setting prices, Chapman says his clients tend to make similar mistakes. Here are three to avoid: