On a side note: If you get an offer from a ginormous publishing house, breathe into a paper bag, throw your shoulders back and smile. You've accomplished something incredible.
Small press publishers are usually start-ups by mom and pop operations. They can be started by author and writer group ventures, self-publishers or even birthed by editors. There is a finite limitation on what they can provide. For the most part, small press publishers don't require agents (although it not uncommon for some of them to welcome one), don't provide advances and have a very limited publicity department or even none at all. They rarely, if ever have any hard distribution behind their books and must rely heavily on the author's sales participation. Some small presses might buy ads, sponsor and arrange books signings, blog tours, video presentations, reviews and inclusion in a few or many online distributors.
If a small press publisher spends money or goes to extraordinary lengths to spotlight a book, it is called "marketing." Anything else by the author is considered promotion, unless the author spends money on banner and placement ads, sponsors their own book signings (buying the books) or gives lectures at meeting halls or libraries that allow the title to be sold there. BTW, don't expect tons of sales at a book signing if you are new to the game or not a heavy seller with multiple break-outs. You can reasonably expect to sell a 12 to 15 books for your first outing--more if you have a huge friend, family, coworker and relative base. You might unload 30 books in that case.
If you can find a small press that provides hard distribution to book stores and offers an advance, which could be a token $100 up to $2,000, you should submit to them first. They are highly sought after and very popular. They usually have huge fan and readership bases. Many of them are award winners. Most of them have glowing sales stats on Amazon, Kobo, Barnes and Noble and the like. They may frequently land in the top 10 or top 100 consistently.
Some of these lofty small presses or medium houses can require an agent, so find out about that up front. An agent can work miracles with a publisher that has worked with agents in the past. It is not unusual for an agent to get a $500 or more advance from a plain, ordinary small press publisher--this has happened to me. If the publisher wants the book bad enough, or several offers have come in, they'll buckle and come up with the cabbage. But an offer will have to earn out before getting any royalites.
Evaluate a small press by the number of years they have been in business. Two to three years is a fairly good indicator that they've survived the hardships and weathered any financial storms. But not always. A seven to 10 year longevity record is much better. Although they can fold up at any time for any reason. Check out their website hits for very high numbers--in the millions would be considered fantastic. Low thousands or hundreds indicates a lack of presence. If nobody visits their site and knows about them, they won't know about you.
How many books do they have? Are they an "author mill" that grinds out a dozen or more books a month and have a huge backlog? If they are, they should be avoided--they don't have the time or finances to spend on promoting or marketing any title. They make money with hundreds of books in the stream while the individual author suffers because of small or non-existent sales. Google their name. Do they appear on multiple Internet distribution sites? If they appear on six or more, they are doing their job in bang-up fashion in getting the word out. Three or four online distributors is about average across the board.
Negotiate the contract if you don't have an agent. Don't shy away from putting a red line through any clause or confusing phrase that seems like a rights grab. If they are an e-book only publisher, why would they want the rights to POD (print on demand) or mass-market paperback? Don't sign all your rights away--especially world rights covering all foreign countries. All publishers, great and small, benefit by having you sign fast, and sign fast on a non-negotiable or boilerplate contract. If you find a publisher that won't budge--walk. Put out some more queries and play the field some more. You don't have to take what you don't like or understand.
It goes without saying that you and your publisher/editor should click and at least like each other. little disputes over cover art, editing and marketing is not a good starting point in a relationship with a publisher. Don't make things hard on them--their job is difficult enough--they're dealing with many authors just like you. Open your ears and listen. Keep your yapper from interrupting or crowding the conversation. Your editor/publisher just might have something very vital and important to say. Learn from them; you'll use that knowledge with future publishers. Praise and support your publisher in the world of ether. Try to avoid smearing their name in public venues. We all have our little quirks and ticks, and sometimes things just don't work out. Attempt to be civil in all your correspondence. And for gawd's sake be patient.
Don't publish with a small press house because you are smitten with the process and the promise of holding a book in your hand. Forget about bragging rights with an e-book publisher. There are hundreds of thousands of authors out there who have signed with an e-book only small press. Although those hundreds of thousands of authors are not really competing with you directly, they sure are diluting the pool and making it harder for your book to be discovered in the vast sea of titles out there.
I have nothing against self-publishing--I've done it with a back list title. However, for a new book, understand that you will be responsible for formatting, editing and creating the cover art. You'll also be the sole promoter and marketer. If you have these resources and the energy, go for it--many small press and display site authors have hit the big time. But don't do it for this reason. Those authors that break sales records are the outliers. It very difficult to get that type of recognition and success.
The best way to increase your odds at acquiring a decent and well respected publisher is to seek out an agent. Always go the agent rounte first. If you've exhausted 30 or more queries without a bite, rework your query until your fingers bleed. A boring query that seems static and familiar is the surest way to get the agent boot.
Whatever you decide, keep writing and enjoying the process. We are the creators and the dream makers.
A Writer is…
A humble, receptive student and negotiator
But the heart that beats within his breast
Is a determined savage
Unfamiliar with surrender