Is social media the great equalizer that allows small businesses to compete with bigger rivals? As just about everyone hops on the social networking bandwagon, some say the answer to that question is yes.

"Social media is essential these days to small businesses, because their customers and their prospects are all there," said Dave Kerpen, CEO of Likeable Local, a marketing and software company that helps small businesses use social media.

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"Pretty much every consumer at this point is using Facebook, Twitter and LinkedIn, and small businesses have to join that conversation." Kerpen said in an interview with CNBC's "On the Money." However, "most small business owners don't have the time to do social media. They're struggling with coming up with the time to run their own business," he added.

Take the Gordons, for example. For 22 years, Kevin and Megan Gordon have owned the Twodo Salon on Manhattan's Upper West Side. Recently, they've updated their mobile and social presence.

"More and more clients are saying, 'Why don't you have a system where I can just request a time?' " to book an appointment by phone, Megan Gordon told CNBC. Added Kevin Gordon: "We're now in the process of changing to a cloud-based software which will allow more convenience to our clients to book an appointment on their phone."

However, is social media best at getting new customers or keeping current ones? Business owners say the verdict is mixed.

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"You're not necessarily going to get a lot of new customers out of thin air," Kerpen told CNBC. Yet he added: "The best way to really optimize social media and make money off it, is to generate referrals from your existing customer base."

Kerpen said small businesses can use social media to build relationships with your current customers, with your current clients. "They can help spread the word for you, and you can get new customers that way."

According to Nielsen, after learning about a product on social media, 43 percent are more likely to buy. The same study found that 93 percent of social media users believe recommendations from family and friends over any form of advertising.

Myriam Gumuchian is the fourth generation of her family to make jewelry. But she told CNBC the visual aspect of social media is working in reaching her customers.

"Women can relate when they see a picture of a ring on a finger, or a necklace or an earring," Myriam said, adding that "we like to show how it's worn in real time. We snap pictures, women do see that and they want to try it on."

With multiple social media options, which are the best platforms for small business? Kerpen suggested that "listening and paying attention to where are your customers are today. What social network are they on the most?"

According to market research firm, IBISWorld, Facebook—which said this week it logged a billion daily active users—has by far the largest market share among social networking sites at 65.4 percent. Next up is Twitter, with a 16.2 percent share. Separately, LinkedIn is third with just over 15 percent.

Kerpen said an e-commerce company should go on Facebook first, but LinkedIn is a better option for a lawyer or accountant seeking clients.

He added that if you're a "blog or a sports or an entertainment-related business, you probably want to be on Twitter first." Kerpen suggested starting with one social network, and expanding from there.

And for those who think social media only targets millennials, Kerpen added that "the fastest growing demo is actually men 50-plus. That's because everyone else is already there."

—"On the Money" airs on CNBC Sundays at 7p.m., or check listings for air times in local markets.