First I want to thank everyone who replied to the first Marketing on a Budget post. I have already implemented some of the ideas that were given.
Has anyone else used any of those ideas?
Next let's raise the budget to $500. What marketing ideas can you come up with to increase your business?

My vote would be
#1 Membership in a leads referral organization such as BNI or NRG (www.networkreferralgroup.com), about $400 per year
#2 Carefully targeted direct mail campaigns

Take your $500 (and maybe more) and joing the Chamber of Commerce. Become active in the Chamber, attend functions, particpate in seminars etc., and above all pass out those business cards. Offer a discount to other chamber members.

How to best invest me $500 advertising budget...

Well I run a service based business. So I would first discover the size of my target market and the advertising options that would most likely put my advert in front of them.

For me a quality sales letter has proven best. I'd send $50 to buy a book or software program that would teach me or show me how to write effective sales letters.

and then send another $50 or so to send that sales letter to a small number of those target customers. And then check me conversion rate of those letters by 'tracking' the advertising sales letter's results.

If my conversion rate is good send out as many sales letters as my remain budget allows. Alot of stamps for $400 lol.

If my conversion rate is low. I would make some small changes to the letter and do another test mailing. test and track the results again. etc...

My ratio of profit per customers (based on a lifetime business relationship) is very high. So I have no problems investing a higher amount of money per potential customer per advertisement.

I'm not in the retail sales or product based business. So I wouldn't have any clue how to advertise for it. But I would invest any part of my $500 budget to hire or learn how to do it.

Even if that ment a leveling off of business this year. For a much greater return in the following years.

I'm in business for myself for the long run. Honestly I micro-manage everthing. Sure it would be easy to hire a PR firm or advertising company. But my conversion rates are higher than my local companies.

I'm nothing special. I was just will to invest in my advertising education. By learnign from those who really know how to do it.

If I was just starting out. If my advertising budget was only $500. I would invest it all in educating myself on the best way to advertise my type of business.

and then put it to work.

Hmm, I think I would cover my van completely with graphics - it would surely turn heads and since I drive all over town any how, it is a mobile billboard.