There are many great books on branding through stories. Some are for inspiration; others provide specific steps you can take. Look for those books that offer ideas for the small business owner as often the books target the large organization with more resources than you may have.
Storytelling: Branding in Practice. Klaus Fog et al. Springer. 2010.
One of the original books on story-based brands. Examples are large brands, but it does offer good comparisons to fairy tales and other accessible ways to create stories.
Stories that Sell: Turn Satisfied Customers into Your Most Powerful Sales and Marketing Assets. Casey Hibbard. AIM Publishers. 2009.
This book focuses on using stories in the sales cycle. It offers very specific techniques for shortening your sales cycle and getting prospects to say yes.
Winning the Story Wars: Why Those Who Tell—and Live —the Best Stories Will Rule the Future. Jonah Sachs. Harvard Business Review Press. 2012. Good explanation of why stories have become so critical now. It also offers some practical advice, although most of the advice is more useful for a large company with marketing resources, than for a small business. Still a worthwhile read.
StoryBranding: Creating Standout Brands through the Power of Story. Jim Signorelli. Greenleaf Bookgroup Press. 2012. Useful book on why you need a story-based brand and exercises on how to get there. It may be more useful for someone with a marketing background than a small business owner trying to do it all with no marketing expertise. I especially liked the I AM your customer exercise.
Tell Me a Story: Storytelling to Create Impact Brands. Jan Bierman. Rare Design Ltd. 2012.
At only 31 pages long (on my Kindle), this ebook is a quick read, but it is an easy introduction to storytelling and includes a few great stories