These days a USP is critical to your business. Gone are the days where you can rely on not having any competition. Now you have to make sure you can stand out from the pack, and that your customer knows it!
A USP is a unique selling proposition (or sometimes known as a unique sales position, or some combination of the two). And it is a short (less than 90 words) concise statement that can tell someone exactly what they will get by shopping with you, that they can't get from the competition.
This is critical because if your customer doesn't know what you do... why would they ever try to find you?
You can't talk about USP's without mentioning the one that put Domino's Pizza on the map:
"Fresh, hot pizza delivered in 30 minutes or less, guaranteed."
This tells you everything you need to know about them. This was done in a time when pizza delivery was slow an unreliable. You had no idea when your pizza would get there, and by the time you did get it, it would be cold. This USP is clear, concise, and addressed a need that was missing in the industry at the time. A need that is important to your customers.
Do you remember why you started in business in the first place? Most business owners notice a need in an industry that's going unfulfilled, and they start a business to fill that need. Why did you start up your business?
There are a couple ways you can differentiate your business from the competition. There's price, being 'different', or becoming more targeted.
Price is the obvious way to differentiate yourself, but I urge you to try something else. Unless there's a reason that you can offer a low price that your competitors can't match, you're asking for trouble. All it takes is someone to come in and take less profit for you to lose your position, and there's no glory in being second cheapest.
Positioning your business as being 'different' is a much better way to go. This can be things like offering a bigger selection, a better guarantee, more convenience, better performance, etc. Find something that you can do that none of your competitors can. (Or something that no one knows your competitors does... but make sure you know for certain what your competition is doing!)
Becoming more targeted is also a great option, especially with the internet and the fact that you can now easily run a nationwide company from the comfort of your own home. What I mean by 'more targeted' is by taking a section of your existing customers that have something in common, and position yourself as a solution just for them. An example of this would be an attorney that specializes in elder law, an engineering firm that specifically works on motorcycle engines, or a health food store that sells specifically to hockey players.
A great way to do this would be to find a bias in your existing customers, and target all of your marketing directly to that niche. All customers lists have some kind of bias if you look hard enough. Maybe most of your customers belong to the same religion. Maybe they all drive the same kind of car. If you can find your bias, you've been unconsciously attracting these customers already, now you can consciously go after them.
In this day and age, if you don't set yourself apart from the rest of your competition, you're not going to be able to take your business to the next level (unless you're really lucky... and a business is not something that should be based on luck).