A retail business would be especially attractive to an entrepreneur for what two reasons?

Before you can begin to sell your product or service to anyone else, you have to sell yourself on it. This is especially important when your product or service is similar to those around you. Very few businesses are one-of-a-kind. Just look around you: How many clothing retailers, hardware stores, air conditioning installers and electricians are truly unique?

The key to effective selling in this situation is what advertising and marketing professionals call a "unique selling proposition" (USP). Unless you can pinpoint what makes your business unique in a world of homogeneous competitors, you cannot target your sales efforts successfully.

Pinpointing your USP requires some hard soul-searching and creativity. One way to start is to analyze how other companies use their USPs to their advantage. This requires careful analysis of other companies' ads and marketing messages. If you analyze what they say they sell, not just their product or service characteristics, you can learn a great deal about how companies distinguish themselves from competitors.

For example, Charles Revson, founder of Revlon, always used to say he sold hope, not makeup. Some airlines sell friendly service, while others sell on-time service. Neiman Marcus sells luxury, while Wal-Mart sells bargains.

Each of these is an example of a company that has found a USP "peg" on which to hang its marketing strategy. A business can peg its USP on product characteristics, price structure, placement strategy (location and distribution) or promotional strategy. These are what marketers call the "four P's" of marketing. They are manipulated to give a business a market position that sets it apart from the competition.

Sometimes a company focuses on one particular "peg," which also drives the strategy in other areas. A classic example is Hanes L'Eggs hosiery. Back in an era when hosiery was sold primarily in department stores, Hanes opened a new distribution channel for hosiery sales. The idea: Since hosiery was a consumer staple, why not sell it where other staples were sold--in grocery stores?

That placement strategy then drove the company's selection of product packaging (a plastic egg) so the pantyhose did not seem incongruent in the supermarket. And because the product didn't have to be pressed and wrapped in tissue and boxes, it could be priced lower than other brands.

Here's how to uncover your USP and use it to power up your sales:

• Put yourself in your customer's shoes. Too often, entrepreneurs fall in love with their product or service and forget that it is the customer's needs, not their own, that they must satisfy. Step back from your daily operations and carefully scrutinize what your customers really want. Suppose you own a pizza parlor. Sure, customers come into your pizza place for food. But is food all they want? What could make them come back again and again and ignore your competition? The answer might be quality, convenience, reliability, friendliness, cleanliness, courtesy or customer service.

• Remember, price is never the only reason people buy. If your competition is beating you on pricing because they are larger, you have to find another sales feature that addresses the customer's needs and then build your sales and promotional efforts around that feature.

• Know what motivates your customers' behavior and buying decisions. Effective marketing requires you to be an amateur psychologist. You need to know what drives and motivates customers. Go beyond the traditional customer demographics, such as age, gender, race, income and geographic location, that most businesses collect to analyze their sales trends. For our pizza shop example, it is not enough to know that 75 percent of your customers are in the 18-to-25 age range. You need to look at their motives for buying pizza-taste, peer pressure, convenience and so on.

• Cosmetics and liquor companies are great examples of industries that know the value of psychologically oriented promotion. People buy these products based on their desires (for pretty women, luxury, glamour and so on), not on their needs.

• Uncover the real reasons customers buy your product instead of a competitor's. As your business grows, you'll be able to ask your best source of information: your customers. For example, the pizza entrepreneur could ask them why they like his pizza over others, plus ask them to rate the importance of the features he offers, such as taste, size, ingredients, atmosphere and service. You will be surprised how honest people are when you ask how you can improve your service.

If your business is just starting out, you won't have a lot of customers to ask yet, so "shop" your competition instead. Many retailers routinely drop into their competitors' stores to see what and how they are selling. If you're really brave, try asking a few of the customers after they leave the premises what they like and dislike about the competitors' products and services.

Once you've gone through this three-step market intelligence process, you need to take the next--and hardest--step: clearing your mind of any preconceived ideas about your product or service and being brutally honest. What features of your business jump out at you as something that sets you apart? What can you promote that will make customers want to patronize your business? How can you position your business to highlight your USP?

Don't get discouraged. Successful business ownership is not about having a unique product or service; it's about making your product stand out--even in a market filled with similar items.

In Start Your Own Business, the staff of Entrepreneur Media Inc. guides you through the critical steps to starting your business, then supports you in surviving the first three years as a business owner. In this edited excerpt, the authors outline 10 important criteria you should evaluate when considering a location for your new business.

Before you start shopping for business space, you need to have a clear picture of what you must have, what you'd like to have, what you absolutely won't tolerate and how much you're able to pay. Developing that picture can be a time-consuming process that's both exciting and tedious, but it's essential you give it the attention it deserves. While many startup mistakes can be corrected later on, a poor choice of location is sometimes impossible to repair.

Be systematic and realistic as you consider the following 10 location points.

Is your operation going to be formal and elegant? Or kicked-back and casual? Your location should be consistent with your particular style and image. If your business is retailing, do you want a traditional store, or would you like to try operating from a kiosk or booth in a mall or a cart that you can move to various locations?

Demographics

There are two important angles to the issue of demographics. First, consider who your customers are and how important their proximity to your location is. For a retailer and some service providers, this is critical; for other types of businesses, it might not be as important. The demographic profile you have of your target market will help you make this decision.

Then take a look at the community. If your customer base is local, does a sufficient percentage of that population match your customer profile to support your business? Does the community have a stable economic base that will provide a healthy environment for your business? Be cautious when considering communities that are largely dependent on a particular industry for their economy; a downturn could be bad for business.

Now think about your work force. What skills do you need, and are people with those talents available? Does the community have the resources to serve their needs? Is there sufficient housing in the appropriate price range? Will your employees find the schools, recreational opportunities, culture, and other aspects of the community satisfactory?

Foot traffic

For most retail businesses, foot traffic is extremely important. You don't want to be tucked away in a corner where shoppers are likely to bypass you, and even the best retail areas have dead spots. By contrast, if your business requires confidentiality, you may not want to be located in a high-traffic area. Monitor the traffic outside a potential location at different times of the day and on different days of the week to make sure the volume of pedestrian traffic meets your needs.

Accessibility and parking

Consider how accessible the facility will be for everyone who'll be using it--customers, employees, and suppliers. If you're on a busy street, how easy is it for cars to get in and out of your parking lot? Is the facility accessible to people with disabilities? What sort of deliveries are you likely to receive, and will your suppliers be able to easily and efficiently get materials to your business? Small-package couriers need to get in and out quickly; trucking companies need adequate roads and loading docks if you're going to be receiving freight on pallets.

Find out about the days and hours of service and access to locations you're considering. Are the heating and cooling systems left on or turned off at night and on weekends? If you're inside an office building, are there periods when exterior doors are locked and, if so, can you have keys? A beautiful office building at a great price is a lousy deal if you plan to work weekends but the building is closed on weekends--or they allow you access, but the air conditioning and heat are turned off so you roast in the summer and freeze in the winter.

Be sure there's ample convenient parking for both customers and employees. As with foot traffic, take the time to monitor the facility at various times and days to see how the demand for parking fluctuates. Also make sure the parking lot is well-maintained and adequately lighted.

Competition

Are competing companies located nearby? Sometimes that's good, such as in industries where comparison shopping is popular. You may also catch the overflow from existing businesses, particularly if you're located in a restaurant and entertainment area. But if a nearby competitor is only going to make your marketing job tougher, look elsewhere.

Proximity to other businesses and services

Take a look at what other businesses and services are in the vicinity from two key perspectives. First, see if you can benefit from nearby businesses--by the customer traffic they generate--because those companies and their employees could become your customers, or because it may be convenient and efficient for you to be their customer.

Second, look at how they'll enrich the quality of your company as a workplace. Does the vicinity have an adequate selection of restaurants so your employees have places to go for lunch? Is there a nearby day-care center for employees with children? Are other shops and services you and your employees might want conveniently located?

Image and history of the site

What does this address say about your company? Particularly if you're targeting a local market, be sure your location accurately reflects the image you want to project. It's also a good idea to check out the history of the site. Consider how it's evolved over the years.

Ask about previous tenants. If you're opening a restaurant where five restaurants have failed, you may be starting off with an insurmountable handicap--either because there's something wrong with the location or because the public will assume your business will go the way of the previous tenants. If several types of businesses have been there and failed, do some research to find out why -- you need to confirm whether the problem was with the businesses or the location. That previous occupants have been wildly successful is certainly a good sign, but temper that with information on what type of businesses they were compared to yours.

Ordinances

Find out if any ordinances or zoning restrictions could affect your business in any way. Check for the specific location you're considering as well as neighboring properties -- you probably don't want a liquor store opening up next to your day-care center.

The building’s infrastructure

Many older buildings don't have the necessary infrastructure to support the high-tech needs of contemporary operations. Make sure the building has adequate electrical, air conditioning, and telecommunications service to meet your present and future needs. It's a good idea to hire an independent engineer to check this out for you so you're sure to have an objective evaluation.

Utilities and other costs

Rent composes the major portion of your ongoing facilities expense, but consider extras such as utilities--they're included in some leases but not in others. If they're not included, ask the utility company for a summary of the previous year's usage and billing for the site. Also find out what kind of security deposits the various utility providers require so you can develop an accurate move-in budget; however, you may not need a deposit if you have an established payment record with the company.

If you have to provide your own janitorial service, what will it cost? What are insurance rates for the area? Do you have to pay extra for parking? Consider all your location-related expenses, and factor them into your decision.