We're looking for ways to grow our dog walking business.
We're a mom & pop business with no special facilities or expertise.
We cater to busy people who don't have time to walk or excercise
their dogs, especially during the day while they're at work. We drive
to their place & walk their dog at their neighborhood park. We charge
$12 for 30 minutes, $16 for 45 minutes, $20 for 1 hour. These seem
to be good rates for this industry for this kind of service.

We aren't too interested in servicing vacationers because we don't
think it's worth the overhead for the amount of work we'll get paid for.
We're looking for regular customers.

We've run google ads driving traffic to a simple webpage but
it's losing money.

We've also placed ads on craigslist and we get more curiousity
seekers than customers. 

Our customers are very happy, they've agreed to be references, and 
we've reminded them we're available incase they need to use us more.
We're planning to ask our customers for referals.

We have capacity for a few more customers but it's going slow.

Pet-related merchants sometimes have corkboards where business cards
and small ads can be placed. A friend of mine who used to operate a
pet-sitting business got most of her clients in this manner.

Post your flyers at local gymns. The owners are getting their exercise
and probably would appreciate help with their dogs. Are there any
hotels in your area that allow dogs? Let the concierge know about your
dog walking services for future referrals.

jollygood,

Two ideas. First, approach anyone in the area you see walking their
dog, introduce yourself (complement them on what a fine annimal they
have!!!) and hand them a brochure on your service. If they seem warm
you can also ask them if they know of anyone else who might be
interested in your service.

Second, assuming that you live in an urban area with distinct
neighbourhoods and there is business to be had in those distant
neighbourhoods, you could consider "franchising" your business. This
idea is driven by the fact that it might not be hard to recruit
reliable dog walkers in those areas, but they don't want to handle the
"business" end of things like billing and collecting.
The secret in most small businesses is volume and so if you branch out
to those more distant neighbourhoods you could easily afford to pay
your associate dog walker 75% of the fee. The math is clear; if you
can find associates to look after an additional 50 half hour
assignments per day that's 50 X $3 = $150 additional dollars per day
in your pocket and your out-of- pocket investment is the cost of
billing, collecting and your payroll.

I hope that helps,  Pulio

You could put advertising on the dogs while you walk them.  Kind of
like an auto wrap.  That would be creative.

Actually, I would try to get your flyers/your business cards with the
groomers.  Maybe try to strike a deal with them that you will swap
advertising/coupons or something.  However, your business sounds more
like a word of month type of operation like babysitting.

I agree with taylor you need to find these people.  Is there a common
trait of your customer?  DINK, professional type, wine drinkers, bed
wetters, whatever.  If so, try to target that common thread.

My friends use this service except on the weekends.  That is when they
walk their dogs theirselves.  I think that is your target time.  Maybe
you pass out your business card with a dog chew or something.  Give a
first time discount or something.

This is my free advise as a non paid google researcher.

Good Luck,  Paul

Print cards and flyers, contact pet stores, groomers and ask if you
may post a flyer and leave cards. Also, don't forget about Dog Parks! 
Leave flyers on cars several times a week.