The way you market your small business is as important as the quality of your company's products and services. Savvy business owners know that marketing a small business effectively doesn't require a massive advertising budget.

You will need to set aside some money in your budget, but the most effective marketing consists of direct referrals, networking directly with your target customers, and creating an online presence (such as a website and social media participation). A huge advertising blitz isn't always the right choice, but every business can benefit from a comprehensive marketing plan.

Learn the basics of marketing a small business with the following guidelines, and visit FindLaw's Marketing and Advertising Laws section to learn more.

1. Build a Great Website

Prospective customers search the internet when choosing what service or product to purchase. A professional presence on the web is important for driving consumers through your doors. A simple, easy to navigate site is perfect as long as it's not a bare-bones site. Project professionalism and quality through your website. And avoid playing hide and seek with prices by being up front about what a customer can expect from your products and services.

2. Optimize Your Company Website

In addition to building a business website, you will want to optimize it for search engines. Search engines such as Google and Yahoo use complex algorithms to match certain search terms with search results. By continually optimizing your site, you can assure that your business pops up near the top of searches. For example, if someone types in "beauty salons in Albany", and your site is optimized for those keywords, your business can be near the top of the search results.

3. Consider Social Media Publicity

The internet is a place where people talk and are talked about. With the emergence of social networking applications that allow customers to rate businesses (such as Yelp), Facebook -- where companies can build pages and have "fans", blogging, and microblogging -- there is a virtual guarantee that your small business may be the topic of a tweet, a comment, or a blog post. When marketing a small business, consider being active on social media avenues, and weigh out any concerns regarding privacy. If you do forge ahead, be sure to maintain professionalism.

4. Encourage Word of Mouth Referrals From Existing Customers

The best, and cheapest, form of marketing a small business is from the mouths of your current customers. People trust their friends' opinions over an advertisement in a newspaper, radio, or television and you should take advantage of this built-in marketing tool. Offer customers discounts on future purchases for each new customer they refer.

5. Target Your Customers and Understand How to Reach Them

Understanding your target audience is critical to getting the most value out of your marketing dollar. Taking an ad out in a major newspaper may get you little response, while reaching out to an influential blogger or listing in a local circular may net you greater value. If you own a restaurant, it makes sense to create relationships with local reviewers, critics, and "foodie" websites and bloggers. A simple investment of your time can net big results if you know where your target customers congregate or what they read. See Your Target Market to learn more.

6. Use the Press to Get the Word Out

If you have a compelling story, use it to full effect. Get the word out to a local media source and they may feature your business in an article or television segment. Even if you don't' believe your story is worthy of a news story, make an effort to stay friendly with local media sources and they may remember your business when they do a related piece.

7. Be Passionate About What You Do

Your enthusiasm for your business will drive more business your way because customers are naturally drawn to those who love what they do. You define your business in the way you conduct yourself in day to day operations. Marketing a small business is only as strong as the product and people in the business, and projecting passion and professionalism is essential in successfully connecting with potential customers.

8. Survey and Follow-Up with Your Customers

The best way to understand what your target customers want is to go directly to the source. Find out why they come to your business, what products/services they like the most (and which they dislike), and anything they would like to see more/less of in the business. By doing this, you can cater to your customers and learn how to best market yourself to the rest of the public. You should also keep a database of customers so that you can follow up on their experience in the store and keep them updated on sales, discounts, and new services or products you're offering.

9. Be Wary of Branding Based on Price

While consumers are sensitive to pricing, by advertising your business as the lowest price, it's essentially a race to the bottom and there will always be someone who's willing to go even lower. As an alternative to proclaiming how "cheap" your products or services are, focus on the value customers will receive. By equating your business to quality and value for the dollar, you can better insulate your business from competitors who undercut your prices.

10. Referral Exchanges with Related Businesses and Promotional Events

You can kill two birds with one stone by creating relationships with neighboring or related businesses and increasing customer awareness through cross promotional advertising or events. If you own a beauty salon, you might approach a neighboring bar or restaurant to host a happy hour event with them providing food and you providing an attractive, young clientele and free samples of your products or discounts on a future visit. Businesses that aren't in direct competition can help each other enormously by working in conjunction.

In Conclusion

There are many different ideas for effectively marketing a small business, but remember that it starts with a great product, a passion for the business, and building upon your network of existing customers. It's called a customer base for a reason -- a successful business builds upon it.

Get Legal Help with Your Growing Business

Just about every facet of running a business potentially involves some amount of legal risk or regulatory requirement. And while an entrepreneur will do everything from mopping the floor to devising an advertising campaign, sometimes it's just smart business to call a lawyer. Consider meeting with a business and commercial law attorney in your area if you need professional legal help.