Have you ever played with the idea of slashing the prices in order to gain more customers? Have you ever thought of undermining the competition by offering your products at better prices? I know I have!

This is one of the biggest mistakes a startup makes, unless of course s/he found a way to cut the overall cost of the business. The consequences of such an action are the following:

A) The perceived value of the product is reduced. In effect, if the product is cheap, the assumption is that its value is less.

B) The profit margin is reduced and may endanger the viability of the business.

C) If the price is lowered, then more products should be sold or more customers should be found. Both of these actions, though, may bear a substantial cost.

D) Slashing the prices sometimes affects the self-esteem of the entrepreneur and, consequently, his/ her performance.

Am I forgetting anything?