Small and medium enterprises (SMEs) that use social media are 56 per cent more likely to increase their revenue, according to research by MYOB.
Around 28 per cent of SMEs reported a revenue increase, compared to 18 per cent of all businesses, according to the MYOB Business Monitor.
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A recent report by Deloitte Access Economies, Connected Small Businesses, also recently found small businesses that actively use digital technologies such as social media and online marketing could see an average annual revenue increase of $350,000 a year.
Research found 20 per cent of SMEs use social media for business purposes, with Gen Y the most prolific users (22 per cent), followed by Gen X (22 per cent), Baby Boomers (18 per cent) and 65 plus (9 per cent).
"One in five business owners now wear an additional hat -- social media manager. Those who embrace that role are reaping rewards beyond building closer relationships with customers, suppliers, partners and others. The financial benefits are clear," Tim Reed, CEO at MYOB, said in a statement. "Many of these social tools, like Facebook or a blog, don't need an investment of money to raise a business' profile, communicate with its target audiences and generate leads; although they do require time."
Reed said only one fifth of businesses use social media platforms, despite nearly half of SME owners using one or more smartphones for business.
He said the researched suggested this was because businesses did not have the confidence to deploy social media.
"More than half our respondents said they would vote for the political party that proposed providing free government-funded training to all small businesses on how to use the Internet to enhance and grow their business," Reed said.
Other findings from the report reveal 10 per cent of SMEs use Skype or VoIP to make business calls, 9 per cent used a company blog to communicate news and 16 per cent use Facebook, YouTube or Google+ to connect with customers.
It also found just 32 per cent of businesses have a website and 21 per cent of SMEs have staff who telework.
The MYOB Business Monitor report surveyed 1005 small and medium enterprises from January to February this year.
Follow Stephanie McDonald on Twitter: @stephmcdonald0