Research, decide, plan. The key to making yourself a good candidate is to decide 3-4 years in advance that you are interested in business school (undergraduate or graduate) so you can start doing the activities that will increase your chances, like starting your own business, learning more about finance, or perfecting a foreign language.
Prepare yourself. There is no cookie cutter way to make yourself the best candidate - rather the trick is to pick one or two activities and concentrate on excelling in them. For undergrad candidates, this can be anything from starting your own business, to sports and student government, to being president of your stock club at your school. MBA candidates should know that most applicants come from finance or consulting backgrounds, so coming from a less traditional pre-MBA background like non-profit or the military can help your chances.
Take the appropriate tests. If you are applying for undergrad, study hard and excel on the SAT. If you are applying for the MBA, you will need to do well on the GMAT. (see review guides in the links section)
Get good recommendations. One key way to distinguish yourself from other applicants is with your letters of recommendation. Building relationships is key in the business world, so you need to distinguish yourself . One thing to also ask when choosing your recommenders is 'is this person a good writer and able to make a persuasive case for me?'
Write stellar essays. Many in the business world are visual or analytical thinkers. That's why the essay is an easy place where you can stand out as a great communicator. Make sure your essays "show not tell" about your strengths using concrete examples, and get feedback from a few trusted friends who have solid writing/editing experience
Pull it all together on time. Business requires attention to detail, so make triple sure that you are following all the guidelines in the application materials and that you, above all, get your full application in on time. It also helps to remind your recommenders in advance so they are not late submitting their letters.