You’re a small startup. You need to grow your business and expand your customer base quickly without spending a lot of money. Online is definitely a great way to go, but the tried and true methods – display or search ads – vary greatly in cost, management time, targeting capabilities and results.Another obvious target for online marketing is social media sites such as Facebook. With more than 500 million active users, Facebook can be a potential goldmine for small businesses to reach new customers. On any given day, more than half of its users log on to interact with friends, play games and post content, which translates into more than 8.3 billion hours a month spent on the social network.This article is not going to focus on Facebook 101 – that is, setting up a static page, building up your friends list, posting content and blasting out information and offers to your followers. These can be effective, but they really only target people you know or who know you, and maybe a small percentage of people beyond your immediate circle.In order to reach a broader audience, you should seriously consider advertising on Facebook. Recent improvements in Facebook’s advertising platform have made it more powerful than before and even easier to use – all the while giving you greater control over audience targeting and ad spend.Facebook has great targeting capabilities and allows advertisers to reach people based on gender, geography, marital status, time of day, education and basic profile information. However, the secret sauce behind Facebook’s ad platform is a “Suggestion Tool” that allows advertisers to reach people based on other interests and information that its members share. It works by analyzing and cataloging mountains of data generated by the entire Facebook community, giving you superior targeting power and the ability to drill down deep. It also blows the doors off Facebook’s previous attempts at targeting (e.g., generic filters such as “18 to 24 males”), which could quickly burn through your budget and not deliver the audience you need.How Do I Begin?First you have to ask yourself – who is my audience? What types of people am I trying to reach, and who would be most interested in my business? Targeting and timing are critical for success, and that’s where the Suggestion Tool excels.For instance, a good friend recently started a personal chef business on the side, targeting busy working families in Silicon Valley. For $50 plus the cost of groceries, she would prepare and serve a gourmet meal at the client’s house. Initially, she started with a simple Facebook page and began reaching out to her friends, acquaintances and former colleagues.However, she soon realized that she needed a little more reach and started advertising. Using Facebook’s Suggestion Tool, she targeted married, career-oriented women ages 35 and up who lived in more affluent areas of Silicon Valley. She timed her ads to appear in the mid- to late-afternoon, when these women began thinking about dinner plans for the family. On the very first day her ads ran, she acquired two new customers and eventually she quit her day job to pursue her newfound career full-time.Creating And Managing Your AdsAs a small business, chances are you and your employees have your noses to the grindstone 24/7, and are wearing multiple hats – none of which say “Official Facebook Advertising Campaign Manager.” Fortunately, Facebook makes it easy to manage your ad campaign. With a self-managed interface, Facebook provides tools that let you set daily spend budgets, analyze how your ads are performing, and manage the frequency of your ads so you can stick to your budget.The key to successful Facebook advertising is having compelling images and copy that attract the user’s eye- after all, what good is having pinpoint audience targeting if your ads are mediocre?Because images account for 50% of the real estate, it’s crucial to draw the user’s eye to your ad and get them to click. Refreshing your real estate (e.g., rotating your images) will increase your chances that a given image will resonate with the people you’re targeting. Depending on how many ads you run, Facebook offers a bulk image uploader so that you can refresh your images to your heart’s content.You should also try changing the ad copy as often as possible to keep it fresh, with messages that speak to your different audience targets. Creating a promotion or discount offer will incentivize them to click on your ad…or better yet, to call. Including a phone number on your ad is ideal for service businesses, like plumbers, personal trainers, mechanics and others for whom having an in-depth Website is not crucial to their business.While this sounds cumbersome, the effort could pay off handsomely. Facebook’s analytics tools can tell you which images and copy resonated best with which audience segments, allowing you to spend more money on the ads that are generating the most results.PricingSo how much is this going to cost? That’s the $64,000 question. Unlike display or search advertising, where you’re bidding on site content, context or keywords, buying advertising on Facebook lets you buy audiences. The more valuable the audience, the higher the cost. That said, given the ability to micro-target audiences with the Suggestion Tool, chances are slim that you and another advertiser will be bidding on the exact same audience profiles.Aside from that, Facebook gives you the flexibility to set your own ad budget. You can spend as little as $1.00 a day. However, in order for your ads to be effective, they need to be seen. The bigger your daily ad spend, the more likely it is that your ads will be seen by your desired audience throughout the day. All in all, you can’t beat Facebook’s precision marketing – especially during a recession.Regardless of whether you’re a VC-backed startup, a sole proprietor or a small mom & pop shop, Facebook’s enhanced advertising platform gives you a cost-effective and manageable way to reach a large, savvy, well-connected audience, making it an essential part of your online marketing strategy.