One of the ways small businesses work to interact with their customers is with social media, and that includes blogging. A blog adds value to the conversation, and helps you establish yourself as an authority in your field. It also opens dialogue with customers and potential customers.
There is an excellent article over at the Intuit Small Business Blog about when you should blog. It covers the issue of a blog posting schedule, and about how you should structure posts in terms of advertising and such.
The author also talks about striking that balance in your blog between promoting your own business and writing naturally about various topics in your niche.