Below is a excerpt from an article on gaining new clients for Professional Service firms but I think the same logic applies to most small businesses. In any case, it is a perfect area for a business application of weblogs. 

Professional service firms are now increasingly using external communications to support sales efforts and to develop new clients.

Let's look at it from your audience's point of view. Most potential clients identify professional service firms they wish to hire in three ways:

• Referrals from relationships in the market
• Events or conferences organized by professional organizations
• Research in trade and business press for specific practice reputation

Factors influencing selection include areas of expertise, reputation and depth of resources. Prospective clients also look for confirmation of your claims and qualifications through press coverage, customer/partner endorsements, and other outside support.

Therefore, in building communications campaigns that help gain new customers, the following goals must be accomplished:

• Build partner relationships with prospects in intimate business settings, such as sponsored events
• Demonstrate your business expertise/knowledge base, reputation in the market and depth of resources in a low-pressure educational environment such as workshops or panel discussions/speaking engagements
• Establish your reputation in the market by persuading the press or existing customers to talk about your qualifications and successes
• Deliver information that is important to your potential customers in a setting that can be controlled, so that the messages you want to get across are properly received
• Leverage your strengths and experience to establish your reputation as an expert insider who truly understands your clients' markets and needs
• Create a communications program that can be reused across all of your business lines

Your communications program should "surround" potential customers with information relevant to their business needs.

Is this not a perfect application for Blogs.

Read more here.