Don't think about competing with the large companies or even with hosts that offer unlimited everything. The customers that "unlimited" plans attract i bet you don't even want. Remember low prices doesn't mean great service and this is the one thing smaller hosts can focus on!

Regarding offline advertising word of mouth and networking within business groups really helps, submit press releases to news agencies, advertisements in local papers can sometimes be cheap as well.

Marketing is a game of cat and mouse. You are the small mouse and the big companys are the Cat. Now invision a wall that has a small whole in side the wall there are customers. The mouse (you) can fit in by offering personal replies to peoples requests and make custom plans that meet there arangement. The big companys dont make custom plans unless your buying 10's of servers there for htere is a market underneath the layer of pading many people dont see. Only way to survive is be personal. You do not have to have a big budget to profit sure it helps but its not necessaraly needed.