Outsmart your competitors, leap to the head of the pack, and become an alpha dog!

How does an average company distinguish itself in the marketplace, generate higher sales than its competitors, and earn the lasting loyalty of customers and employees?

Alpha Dogs tells the inspiring stories of savvy entrepreneurs who discovered the perfect formula and rose to the top. In her personal and probing style, Donna Fenn, a twenty-year veteran of Inc. magazine, introduces eight men and women who share their hard-earned insights and practical tips — from Chris Zane, whose retail bike shop has perfected the art of customer service, to Deb Weidenhamer, who transformed a sleepy auction house with her innovative use of technology. Alpha Dogs is a practical guidebook for every current and aspiring self-starter who wants to stand out and succeed.

If you own one of the 5.7 million small businesses in the United States, or are tempted to take the leap of faith required to start one, there's good news and bad news. Every year, 10% of small businesses-a half million or so-shut down for good; a quarter of all businesses never make it past their second year; 60% close after six years.

Today, small companies are up against an unprecedented set of challenges:

• Consumers are more educated, demanding, and fickle than ever before.
• Consolidation in nearly every imaginable industry is breeding behemoth competitors.
• Technology is enabling tiny competitors to look much bigger and allowing bigger competitors to forge more intimate relationships with customers-maybe your customers.
• Saturation of the marketplace by a growing number of products and services is making it even more difficult for small businesses to distinguish and differentiate themselves.

Under those circumstances, who in their right mind could expect to be a shining star in the vast entrepreneurial firmament?

You'd be surprised. According to the Global Entrepreneurship Monitor research program, established by Babson College and the London Business School, more than one in ten adult Americans is now starting or growing a new business; every year, more than 500,000 new start-up companies replace those that have gone under. In spite of the odds, it seems that entrepreneurs are relentlessly optimistic. The good news: they have every reason to be.

Even as small companies are facing new hurdles, they're also being presented with a fresh set of opportunities. There's never been a better or more exciting time to be a small business owner, or a more critical time to begin transforming your company into a leader of the pack. Here are seven reasons why:

• Goliath Backlash. With 2004 revenues of $256.3 billion, WalMart Stores, Inc., now accounts for more than 5% of total U.S. retail sales. But wherever you find one of their 3,600 stores, you're also likely to find a heated community debate: the retailing colossus promises low prices and jobs (albeit low-wage ones) for local residents, but will it also threaten mom-and-pop businesses and turn downtown into a ghost town?

  Some communities have even lobbied successfully to keep WalMart out: in the spring of 2005, for example, small business owners, City Council members, and union officials in the Rego Park neighborhood of Queens, New York, were so vocal and persistent in their opposition to a proposed Wal-Mart (New York City's first) that the developer scrapped the plan. Sprawl-Busters, a national organization founded by anti-Wal-Mart activist Al Norman in 1993, lists on its Web site 248 communities that have won battles against Wal-Mart and other big-box retailers. Of course, they are the exception, not the rule, but the very existence of such groups is telling.

  The Wal-Marts, Home Depots, and Targets of the world are certainly here to stay for the foreseeable future, but their dominance and prevalence have caused a backlash among a growing number of consumers who are becoming tired of their predictability and conformity. And while these folks may not go as far as the activists who boycott the big boxes entirely, they are more and more likely to gravitate toward the more civilized and manageable local businesses that provide an antidote to the crowded aisles of superstores.

• Proliferation of Small Business Alliances. All over the United States, local small businesses are responding to Goliath backlash by uniting to make themselves more powerful, visible, and attractive to consumers eager to support their local economies. Back in 1998, a...

Donna Fenn is a long-time contributing editor at Inc. magazine and a small business evangelist. She lives in Pelham, New York.