Size does not matter. The smallest websites have the same potential of succeeding on the web as the giant companies. The web levels the playing field. You have the ability to reach national as well as international customers. You want to be perceived as a professional organization.
Free sites are highly unprofessional and cheap.
Customers will view your company as unwilling or unable to spend a few extra dollars on marketing. In the end, they will go with a rival company they perceive as professional and trustworthy. Free sites don't allow any room for creativity. You can have your website updated as frequently as you wish, with unlimited data transfer.