One of the biggest mistakes small business owners make is not charging enough for what they sell. Too many entrepreneurs use simple math to figure out how much to charge for their product or service. They decide to compete on price by charging as little as they can get away with and still pay their bills. They think that offering the cheapest price will win them more customers.

That's not a sustainable strategy for the long run. It's basically telling customers that there's nothing special about what you're selling.

It's better to figure out how much your ideal customer would pay for the specific benefit you sell. For example, if your product saves time, think about how much your ideal customer would pay for more free time. He or she might pay 10 times what you're charging just to have more R&R.

You could also set your price to match -- or exceed -- your customers' discretionary spending. Let's say research shows that your clients strive to do more, be more and have more. They're reaching up. Making your service more expensive than its competition sends the message that it's higher quality and more valuable. If you make your service feel like an achievement, achievers will pay more for it.