As the owner of a one-location bookstore, Gil Pili can't afford mass advertising campaigns like a national chain. So the founder and president of Cornerstone Books in Salem, Mass., relies on inexpensive e-mail customer newsletters, in-store events publicized through free placements in the local newspaper's events calendar, and promotions done in partnership with schools and non-profit groups. "It's key for us," Pili says of his low-cost promotional techniques. "We can't afford the rent to be in a mall, so we rely on promotion to get people in the door. We can't just wait for people to walk in. We have to go out and look for them."

Nationwide, specialty retailers like Pili spend 1 to 3 percent of revenue on advertising, according to Bizstats.com, a Washington, D.C., compiler of business data from mostly government sources. Small businesses like Pili's occupy the bottom of that range, meaning big competitors outspend him dollar-for-dollar by a lopsided margin. Yet small businesses can promote effectively without spending a lot, says David Urban, marketing professor at Virginia Commonwealth University in Richmond, Va. "Promoting extensively is not as important as promoting intelligently," says Urban. "You want to promote smart, not outspend everybody else."

Before doing any promotion, think about who your customers and prospects are and the best ways to reach them. Set objectives, price out each promotional method, and do the ones you can afford and that make sense. Measuring advertising as a percentage of revenues can help you see what competitors are doing, but it's not a way to budget for your own promotions, Urban stresses. "That's putting the cart before the horse," he says.

One of the least expensive promotional channels is attractive, well-designed and informative company letterhead and business cards. You should also add an inexpensive trifold or bifold brochure with basic information about your company, and its services and products. Many popular word-processing programs include templates and other tools to help you design and produce your own brochures.

Once you've covered the basics, be creative about ways you can spread your name and message. "Get together with a specialty promotion company to check out the wide range of items that can be emblazoned with the company logo -- from pens, to refrigerator magnets, just about anything imaginable," Urban says.

Many businesses can follow Pili's lead and get free media mentions by sending information about events, openings, expansions, hires and promotions, product announcements and other news to publishers and broadcasters covering their market area. Laura Beck, senior vice president with the Porter Novelli public relations agency in Austin, Texas, recommends distributing press releases through an inexpensive online press release service such as PR Web.

You also want to make it easy for media to find you when they're looking for someone to feature in an upcoming broadcast or article. Beck suggests putting keywords describing your business and expertise in the text or in a block of tags at the end of news releases so your news will turn up in Web searches. Be sure to include a link to your website in all press releases, and build a press area on your website where you can archive press releases, background on your company, and contact information to help members of the media reach you for interviews.

Partnering with other organizations is another way to inexpensively promote. Pili hooks up with local schools and non-profits, selling books at events his partners do the work of promoting. "That's a really good way to go if you make sure you partner with other groups that have similar interests," he says. You can do similar things online. For example, you may be considering starting your own blog. But Beck recommends that small firms participate in others' well-established blogs rather than trying to start their own. Include a link back to your website in your posts.

You can also market inexpensively by joining local civic and service clubs such as Rotary and Kiwanis. "Get involved in these organizations, advertise in their newsletters -- usually really cheap," Urban says. "Develop a reputation as a company that does well and does good."

As your company grows, it may become cost-effective to invest in mass marketing to reach a broader market, Urban says. Meanwhile, careful thought and a little imagination can have as much or more impact than a pile of money.

Mark Henricks is a freelance writer based in Austin, Texas.