One of the most significant challenges facing every small business is this:

How do you stand out from the crowd of competitors in your industry?

Marketers refer to the process of standing out from the crowd as "differentiation." The problem is that all your competitors are doing everything they can to stand out as well. The opportunity you have is that many of your competitors don't do a very good job of standing out; they tend to resort to cutting prices as their principal means of differentiation.

Fortunately, differentiation doesn't have to be costly. Here are some tips:

• Communicate a professional image. This means giving your business an overall appearance, or "look." This doesn't mean that you must have expensive offices and furniture, or the fanciest trade show exhibits. But it does mean being consistent in your appearance, and sensitive to the fact that everything your customers and prospects see conveys your image. And with professional apparel, pride comes through, loud and clear.

• Stay in front of prospects and customers on a regular basis. Part of your challenge is to keep your name in front of prospects and customers so that, when the time comes to make a buying decision, your company comes to mind. Of course, you can advertise, but there are lower-cost approaches as well. These include regular newsletters with company news, direct mail solicitations to announce new products or services, and a regularly updated Web site.

• Demonstrate a customer orientation. Companies that show an ongoing interest in customers often stand out from their competition. This means phoning customers after they've completed a purchase to measure their satisfaction. It means standing behind your product or service if there is dissatisfaction. And it means training your employees to be sensitive to customer needs.