Most people would agree that small businesses are the backbone of the American economy. What they do not realize is how challenging it is today to operate a small business in a local market.

There is no doubt to me that the number one challenge local business owners face is how to effectively advertise their business. This is harder to do in a larger market than it is a small one.

For example, small business owners in rural towns still get a pretty good return on their advertising investment in the yellow pages. One publication will cover many small towns in the region and people still use those to find a business when they need one.

As you move into larger markets Yellow Pages become less effective. For example the Denver Yellow Pages used to be extremely thick and most businesses advertised in them.

As they became more expensive businesses began to advertise in the local yellow pages for their specific market. However today these do not do the jobs they once did.

What I see local business owners doing now is promoting more by direct mail or in local newspapers. This is better than Yellow Pages that people no longer use, but still does not satisfy the challenge of reaching the masses for your business niche.

Almost everyone I know today uses the Internet to search for things on a local level. If they need a dry cleaner in San Francisco they Google search it.

For example, "San Francisco Dry Cleaner" with or without the quotation marks. This will bring up the most relevant results according to Google.

Depending on the category you will find sponsored results across the top and down the right-hand side. These are businesses who are using Google Adwords to advertise for these keywords.

On the left and down the middle of the page you will see results by Google maps, and then under that will be the organic results of the most popular sites according to Google.

The bottom line here is you need to be found for as many keyword phrases as people are searching for if you expect to compete in your local market.