Doing business in the face of constant adversity.?

My business partner and I started a business with zero start-up capital. We had no loans, no grants, no money from friends or family; we just had what we could scrape together and sweat equity.

The business is doing ok. We aren't making a profit yet, but we can pay the rent consistently, and the bills most of the time.

The problem we face are these competitors who show up out of nowhere with huge startup capital, spamming the area with advertisement, trying to muscle in on our business. We've had this happen a number of times, and almost without fail these businesses go under in a couple of years due to mismanagement. The problem is that a new one just popped up, started putting their signs in front of our business, and at this juncture in time, we don't know if we can just sit and wait out the two year period until they go away. We have no advertising budget to speak of, just a sign out front. How do you fight a competitor with a virtually unlimited advertising budget?

We have tried local advertising in papers and place mats in restaurants. They do not pay for themselves. We do advertise online and that works better. Still all our online advertising is free.

Go to http://www.score.org/index.html and in the upper left hand corner, enter your zip code. On the next screen, you will get information in the nearest SCORE chapter. Call them and arrange for a free meeting with a SCORE counselor to discuss marketing your business.

SCORE is a nonprofit association dedicated to entrepreneur education and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).

SCORE has 389 chapters in locations throughout the United States and its territories, with 10,500 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors.

Maybe put up a website, you should be able to do that on your own? There are a few programs, like front page that make it easy.
If you had a website you could let people sign up for a newsletter or special offer list?
You could run a competition online or somehow? Depends what kind of business I guess.
Have an open day and give out tea and biscuits or wine and cheese? Then you hand them all little pamphlets which you could print on your computer yourself?
Send out a student to put pamphlets that you printed into peoples letter boxes?
Good luck

Find some angry teens and pay them to go around and vandalize the competition's signs. Just kidding. That would be too much like a startup of "mini-Sopranos".

How about going into the sign business? That way all of your previous competitors would have to give money to you for a change. Once again...kidding...that can require a LOT of startup capital.

The way my dad has always outdone the big name competition is by word-of-mouth customers. Customers that he gives top service and low price to spread the word fast. They give each other info about how he performs better services for a cheaper price to their friends, and then he steals business away from the big guys that way.