I see that the basis of "how" was addressed, so I will address what a blog is and why to start it in the first place.
Boiling it down to the molecular level, a blog=content. A good way to think about a blog is a company differentiator, in the context of sales and marketing, is what sets you apart from your competition. Many companies offer the same product or service as you do, so your blog is your opportunity to:
A) Establish yourself as a subject matter expert, with a deep dive explaining the minutia of the particular subject matter and
B) Build a content database enhancing your relevance for the subject matter within the appropriate search rankings.
As you build out the content database, you will have an opportunity to create strong titles, anchor tags, URLs, etc... to help fuel your relevance over your competition. And in doing so, search engines' algorithms will detect this content and build it into their search ranking calculations. Subsequently, people who search and find your content are more likely to buy from you, since they will learn from your blog posts and become more confident in your ability to deliver the product or service.
And this brings me to the last point about blogs - write them for readers, not for search engines, because most modern search engine algorithms analyze people's behavior. This means that people who find your content must have a reason to stick around, browse and read for some time before leaving, in order for your blog to have a positive effect on your rankings. If people find your blog and immediately leave, the search algo will detect this behavior and deem your content inadequate.
Blogging is a whole art and science, and probably deserves several threads on its specifics...maybe for another day