The thing about operating a small business is: you don't have a lot of money to spend (waste?) on marketing of any kind. But you have a website, and online marketing is "cheap" compared to billboards: maybe even free. But where do you start? How do you know if it's working? How do you make it work better?

There's a wide variety of strategies: adwords/facebook/twitter advertising ($), search engine optimization (free), social media presence (free), email marketing (free). Ideally, you should use each of these strategies and allow the strengths of one to complement the weaknesses of the other. But first:

Prerequisites

If you haven't already, you should get a website put together to represent your business. A facebook page or twitter handle may get you 50% of the way there, but there's no substitute for being able to control what gets displayed on your site and how it looks. It gives you the flexibility you need to pursue all of the online marketing channels.

In order to make sure you're spending your money wisely, you need to have a way to evaluate how different sources of traffic (ie, email traffic vs SEO traffic) perform once they get to your site. Once you have a website, make sure that you activate Google Webmaster Tools and set up Google Analytics. These two tools will give you insight into how your marketing efforts are performing. Best of all, they are both free.

A basic Google Analytics setup will allow you to track the bounce rate, or the percent of people who leave your site after only seeing the main page. A low bounce rate means that visitors are looking at several of your pages before leaving and suggests that they are interested in what you're selling. If you provide a service that can be purchased directly from your website (for instance, reservations or requesting takeout delivery), you can set that up as a goal in Google Analytics and track the percent of visitors who execute that action as another way to judge the effectiveness of a campaign.