Great thought, I went back in and checked. You're able to target to State or DMA... so in most cases you're going to have to settle for the greater metro area. For example, I was able to target Cleveland-Akron, Ohio, but not Westlake Ohio (where our office is), from what I've seen with other advertising networks, this isn't too bad.
For small businesses, it'd probably be best to target either the metro area, or followers of businesses near your location. For example, if I was running a small business in Westlake I would not choose Cleveland-Akron, since that's going to give me too many people. Instead I'd focus on followers of @WestlakeOhio etc.
Good feedback Zach and great thinking! Thanks for the comment!