The challenge with Internet marketing for small business is that the challenges on the Internet are the same regardless of the size of the firm. The Internet is inherently non-geographical. Certainly, Google is doing things to try and change this. But at this point, the majority of terms searched in Google are for terms that are not geographically targeted. For example, people go online and search for "great Restaurants" rather than "great Restaurants Rochester NY". I believe this will change over time. But that's the trend today.
So what does this mean for Internet marketing for small business? It means trouble. It's trouble because the small business budget is no match for the medium or large business that is chasing the very same terms. The Internet, the almighty equalizer, really hurts the little guy here. Think this through. How does a small business selling lawn furniture in upstate New York compete with Home Depot's national SEO or paid search campaign on the topic of lawn furniture? They can't.
As we offer Internet marketing for small business clients, we try to help them find the small niches that might have been overlooked by the big businesses. There are also longer tail terms that can be pursued. Finally, Google does like to rank tightly focused sites. So there room to out-maneuver the big business if your site is extremely focused. But all of these tactics require research and time. Small businesses generally don't have that. Which is why they should consider outsourcing Internet marketing even more than the big guys.