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Around half of small businesses are using social media, but many do not find it useful, according to research by a small firms trade body.

Non-profit trade body the Forum of Private Business (FPB) surveyed 5,800 small and medium sized enterprises (SMEs) to find out what digital media they used. It said that 52 per cent of firms used a social networking site such as Facebook or LinkedIn, but that 27 per cent of the companies said that social media was 'not useful' or 'useless' to them.

It also found that 25 per cent of companies said that social media sites were 'useful' or 'very useful' to them.

"We believe that social media does hold a great deal of potential for many SMEs," said FPB spokesman Phil McCabe. "Its conversational, real-time nature makes it ideal for entrepreneurs and small, dynamic firms which often have much more relaxed attitudes towards public relations than big corporations. Also, sites like Twitter can provide valuable and cost-free feedback on customer and client satisfaction."

"However, small businesses are a diverse bunch and what works for one company may well not be suitable for another, so it's likely that our figures reflect the business owners whose firms aren't suited to social media because of the sector or market they're in," he said.

The research also found that 19 per cent of SMEs surveyed did not have a website, while another 19 per cent used websites to trade directly, using card processing systems or PayPal for payment.

The companies said that the biggest problems they faced in using communications technology were spam emails and fraud.

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