The following applications and resources are mobile and PC friendly:

Accounting: Quickbooks, Wave, Google Sheets

Order Tracking: Google Form, Monday.com, Sage,

Customers or Other Surveys: Survey Monkey, Qualtrics, FreeOnlineSurveys. Google Forms

Marketing: Facebook, Instagram, Linked In, TicTok

Payments: Square, PayPal, Zettle, Venmo for Business, Cash App Business, Stripe

Website creation: Wix, WordPress, SquareSpace, Weebly, Shopify

Point of Sale (POS) Systems: Lightspeed, Toast, GoDaddy, Posnow, Rezku, Clover

Scheduling software: Google calendar, Calendy, Square Appointments, Setmore, Booksy

Invoicing software: Wave, PayPal Invoicing, Square Invoices, Zoho Invoice, Quickbooks Simple Start

Mileage tracking: MileIQ, Everlance, Stride, Quickbooks Self-Employed

Customer Relationship Management (CRM): Saleforce, HubSpot, Zoho, Less Annoying CRM, Google Sheets, Bitrix24, AirTable)

Using Point of Sale (POS) Systems to Strengthen Your Business:

Many small business owners start with very simple tools — a cash box, a phone with a Square reader, or a basic cash register. While these options work, they only tell you how much money came in that day. They don’t help you understand what’s really driving your sales or where your opportunities for growth are.

A Point of Sale (POS) system does much more than process payments — it acts like a mini business computer. Depending on your industry, POS systems can be tailored for restaurants, retail shops, salons, or service businesses. Beyond handling credit card transactions and bank deposits, a good POS system can track inventory levels, sales trends, and even customer preferences.

When used effectively, a POS system helps you turn your business into a learning tool. You can test new ideas — like running a short-term discount — and instantly see whether sales increased. You can monitor which products sell fastest, know when to reorder, and understand which promotions actually work. This data helps you make smarter, evidence-based decisions instead of relying on guesswork, allowing your limited time and money to go further.

And importantly, POS systems don’t have to be expensive or complicated. Many low-cost, mobile-friendly options are available that work right from your smartphone with a small card reader. These systems not only make your business look more professional and give customers more ways to pay, but they also reduce mistakes in record-keeping and help you stay organized as your business grows.

Some recommended low-cost POS options for small businesses are Square POS and Clover Station/Flex POS. There are Google Sheets POS System templates available online for $8.99.

Summary of Each Option

• Clover Point of Sale System (Clover Station): A full station setup with hardware, software and robust retail capabilities. Ideal if you have a dedicated checkout area. Pricing varies but mid-tier packages start around $84.95/month software in addition to hardware. Merchant Maverick+2Tech.co+2

• Google Sheets POS System (Template Only): A minimal-cost software template that works within Google Sheets — no monthly subscription, no hardware commitment. Great for very simple operations on a tight budget.

• Clover Flex Handheld POS System: A mobile first POS device for businesses that take payments on the go or outside a traditional counter. Hardware cost around $749 or used options around $499.

Click here to view a chart with key comparison points to choose a POS system.

Recommendation

• If you’re start­ing on a tight budget and your sales are simple (few SKUs, mostly cash or mobile payments), then a template-based system like the Google Sheets POS is a strong choice.

• If you have a dedicated counter space or store and expect regular foot traffic and inventory, go with a full station POS (like Clover Station) for more features and better insights.

• If you’re operating mobile or pop up (market stalls, delivery, service calls), a handheld POS like Clover Flex makes a lot of sense — lighter hardware, mobile friendly.

Click here to see a guide to a POS set up for a boutique (Kingdom Closet).

Accounting Software Options

1. Wave

   • Cost: Free (fees for payments)

   • Ease of Use: Very Easy

   • Best For: Service providers, freelancers, microbusinesses

   • Key Features: Invoicing, expense tracking, basic reports, receipt scanning

   • Limitations: No advanced inventory or payroll (payroll costs extra)

   2. Zoho Books (Free Plan)

   • Cost: Free for businesses under $50k revenue/year

   • Ease of Use: Moderate

   • Best For: Small service businesses, early-stage startups

   • Key Features: Invoicing, expense tracking, bank reconciliation, mobile app

   • Limitations: Some features only available on paid plans

   3. QuickBooks Simple Start

   • Cost: ~$15/month (discounts often available)

   • Ease of Use: Easy

   • Best For: Businesses wanting all-in-one accounting & tax prep

   • Key Features: Invoicing, expense tracking, tax reports, bank integration

   • Limitations: Monthly cost; includes more features than some may need

   4. FreshBooks Lite

   • Cost: ~$6/month (discounts often available)

   • Ease of Use: Easy

   • Best For: Freelancers, service businesses

   • Key Features: Invoicing, time tracking, expense tracking, mobile app

   • Limitations: Limited to 5 billable clients on Lite plan

   5. Excel / Google Sheets (Manual)

   • Cost: Free (if already have Office/Google account)

   • Ease of Use: Moderate (requires setup)

   • Best For: Very small operations with few transactions

   • Key Features: Full customization, works offline/online, no subscription required

   • Limitations: Manual entry, no automation, higher chance of errors

Here are some online solutions to help you stay on top of your numbers.

Order Tracking Tools

1. Google Sheets

   • Cost: Free

   • Ease of Use: Moderate

   • Best For: Custom tracking for small volume

   • Key Features: Fully customizable, shareable, works offline in app

   • Limitations: Manual entry, no automation

   2. Trello (Free Plan)

   • Cost: Free (basic plan)

   • Ease of Use: Easy

   • Best For: Visual tracking of orders

   • Key Features: Kanban boards, drag-and-drop cards, checklists, mobile app

   • Limitations: Requires setup for order workflow

   3. Shopify Order Management

   • Cost: Included with Shopify plan

   • Ease of Use: Easy

   • Best For: Online store owners

   • Key Features: Centralized order tracking, inventory sync, automated updates

   • Limitations: Requires Shopify subscription

   4. Square Dashboard

   • Cost: Free (with Square account)

   • Ease of Use: Easy

   • Best For: Sellers already using Square POS

   • Key Features: Order history, status tracking, integrates with payment system

   • Limitations: Limited for large/complex orders

   5. Zoho Inventory

   • Cost: Free (up to 20 orders/month)

   • Ease of Use: Moderate

   • Best For: Small wholesalers or growing product businesses

   • Key Features: Tracks stock levels, sales orders, purchase orders

   • Limitations: Paid plan needed for higher volume

Website Platforms

1. Wix

   • Cost: Free plan; paid plans from ~$16/month

   • Ease of Use: Very Easy

   • Best For: Beginners who want drag-and-drop design

   • Key Features: Hundreds of templates, mobile-friendly, built-in SEO tools

   • Limitations: Free plan shows ads; limited advanced features without paid plan

   2. Squarespace

   • Cost: From ~$16/month (includes hosting)

   • Ease of Use: Easy

   • Best For: Visual brands, portfolios, small business sites

   • Key Features: Elegant templates, mobile optimization, built-in analytics

   • Limitations: No free plan; slightly less flexible than Wix for drag-and-drop

   3. Weebly (Square)

   • Cost: Free plan; paid from ~$10/month

   • Ease of Use: Very Easy

   • Best For: Small shops, basic service sites

   • Key Features: Drag-and-drop builder, simple online store, integrates with Square

   • Limitations: Fewer design options than Wix or Squarespace

   4. WordPress

   • Cost: Free plan; paid from ~$8/month

   • Ease of Use: Moderate

   • Best For: Content-heavy sites, blogs, scalable growth

   • Key Features: Customizable themes, plugin options, blogging tools

   • Limitations: Steeper learning curve for beginners

   5. Shopify

   • Cost: From ~$39/month

   • Ease of Use: Easy

   • Best For: E-commerce-focused businesses

   • Key Features: Full online store, payment integration, inventory management

   • Limitations: Higher monthly cost; not ideal for service-only businesses

   6. GoDaddy Website Builder

   • Cost: From ~$10/month

   • Ease of Use: Very Easy

   • Best For: Quick setup for basic sites

   • Key Features: Fast templates, built-in marketing tools

   • Limitations: Limited customization and design flexibility

   7. Google Sites

   • Cost: Free

   • Ease of Use: Easy

   • Best For: Very simple informational sites

   • Key Features: Simple templates, integrates with Google Workspace

   • Limitations: Minimal design customization, no built-in store capability

Here’s a short guide with tips and steps to help you build your website.

Scheduling Software

1. Google Calendar

   • Cost: Free

   • Ease of Use: Very Easy

   • Best For: Basic appointment tracking

   • Key Features: Works on any device, shareable links, integrates with Gmail

   • Limitations: No built-in booking or payments

   2. Calendly

   • Cost: Free plan (1 event type); paid from ~$8/month

   • Ease of Use: Easy

   • Best For: Service-based businesses needing online booking

   • Key Features: Shareable booking link, syncs with calendars, auto-confirmations

   • Limitations: Limited customization on free plan

   3. Square Appointments

   • Cost: Free for individuals; paid for teams

   • Ease of Use: Easy

   • Best For: Service businesses already using Square for payments

   • Key Features: Online booking, payment integration, reminders

   • Limitations: Transaction fees for payments

   4. Setmore

   • Cost: Free plan (up to 4 users)

   • Ease of Use: Easy

   • Best For: Salons, personal services, small teams

   • Key Features: Online booking page, email reminders, mobile app

   • Limitations: Text reminders only on paid plan

   5. Booksy

   • Cost: Paid from ~$20/month; free trial available

   • Ease of Use: Easy

   • Best For: Beauty, wellness, personal service industries

   • Key Features: Marketplace exposure, reminders, payment processing

   • Limitations: Higher cost than basic tools

   6. SimplyBook.me

   • Cost: Free plan (50 bookings/month); paid from ~$9.90/month

   • Ease of Use: Moderate

   • Best For: Any service business needing advanced booking rules

   • Key Features: Website booking widget, multiple payment options

   • Limitations: Free plan has booking limits

   7. Acuity Scheduling

   • Cost: Paid from ~$16/month

   • Ease of Use: Moderate

   • Best For: Consultants, coaches, professional services

   • Key Features: Custom forms, payment integration, time zone handling

   • Limitations: No free plan

Invoicing Software

1. Wave

   • Cost: Free (fees for payment processing)

   • Ease of Use: Very Easy

   • Best For: Freelancers, service-based microbusinesses

   • Key Features: Create/send invoices, track payments, simple reports, mobile app

   • Limitations: No advanced inventory; payroll costs extra

   2. PayPal Invoicing

   • Cost: Free to send; fees for payments

   • Ease of Use: Easy

   • Best For: Businesses already using PayPal

   • Key Features: Professional templates, global payments, mobile-friendly

   • Limitations: Transaction fees (~2.9% + fixed fee)

   3. Square Invoices

   • Cost: Free to send; fees for payments

   • Ease of Use: Easy

   • Best For: Service providers and product sellers using Square

   • Key Features: Mobile invoicing, recurring billing, payment tracking, integrates with Square POS

   • Limitations: Fees (~2.9% + 30¢ per payment)

   4. Zoho Invoice

   • Cost: Free

   • Ease of Use: Moderate

   • Best For: Small businesses needing automation

   • Key Features: Custom templates, time tracking, recurring invoices, mobile app

   • Limitations: Slightly more complex setup

   5. QuickBooks Simple Start

   • Cost: ~$15/month

   • Ease of Use: Easy

   • Best For: Businesses wanting all-in-one accounting + invoicing

   • Key Features: Invoicing, expense tracking, tax reporting, bank integration

   • Limitations: Monthly fee; more features than some small businesses need

   6. FreshBooks Lite

   • Cost: ~$6/month (discounts often available)

   • Ease of Use: Easy

   • Best For: Service businesses, freelancers

   • Key Features: Invoicing, time tracking, expense tracking, mobile app

   • Limitations: Limited to 5 active clients on Lite plan

   7. Invoice Simple

   • Cost: Free basic; ~$6/month for premium

   • Ease of Use: Very Easy

   • Best For: Entrepreneurs who want quick, no-frills invoicing

   • Key Features: Simple mobile app, send via email/text, easy to learn

   • Limitations: Lacks advanced reporting and automation

Mileage Trackers

1. MileIQ

   • Cost: Free for 40 drives/month; $5.99/month for unlimited

   • Ease of Use: Very Easy

   • Best For: Simple, automatic tracking without manual start/stop

   • Key Features: Auto-detects drives, swipe to classify trips, IRS-compliant reports

   • Limitations: Free plan limits number of drives per month

   2. Everlance

   • Cost: Free manual tracking; $8/month for auto-tracking

   • Ease of Use: Easy

   • Best For: Mileage + expense tracking in one app

   • Key Features: GPS mileage tracking, expense logging, tax-ready reports

   • Limitations: Automatic tracking only in paid version

   3. Stride

   • Cost: Free

   • Ease of Use: Very Easy

   • Best For: Gig workers and solo entrepreneurs wanting no-cost tracking

   • Key Features: Unlimited free auto-tracking, trip categorization, expense tracking

   • Limitations: Fewer advanced reporting/customization features

   4. QuickBooks Self-Employed

   • Cost: Starts at $15/month

   • Ease of Use: Easy

   • Best For: Entrepreneurs already using QuickBooks for accounting

   • Key Features: Integrated with bookkeeping, auto-trip detection, syncs with tax prep

   • Limitations: Requires paid subscription; overkill if not using QuickBooks

   5. TripLog

   • Cost: Free manual tracking; from $5/month for auto-tracking

   • Ease of Use: Moderate

   • Best For: Businesses needing advanced tracking options

   • Key Features: GPS tracking, odometer readings, multiple vehicles/drivers, accounting integrations

   • Limitations: Learning curve with advanced features

Payroll Software

1. Gusto

   • Cost: Starts at $40/month + $6 per employee

   • Ease of Use: Very Easy

   • Best For: Small businesses wanting full-service payroll + HR tools

   • Key Features: Automatic payroll & tax filing, W-2/1099, direct deposit, benefits management, employee self-service

   • Limitations: Higher cost for very small teams

   2. Square Payroll

   • Cost: $35/month + $6 per employee OR $6/contractor only

   • Ease of Use: Very Easy

   • Best For: Businesses already using Square for payments

   • Key Features: Integrates with Square POS, automatic tax filing, direct deposit, contractor-only pricing

   • Limitations: Limited HR features compared to Gusto

   3. OnPay

   • Cost: $40/month + $6 per employee

   • Ease of Use: Easy

   • Best For: Budget-friendly full-service payroll

   • Key Features: Payroll & tax filing, benefits admin, multi-state payroll

   • Limitations: Fewer integrations than competitors

   4. Payroll4Free

   • Cost: Free for up to 25 employees; $12.50/month for extra services

   • Ease of Use: Easy

   • Best For: Very small businesses wanting zero-cost payroll

   • Key Features: Basic payroll processing, manual checks, optional tax filing

   • Limitations: Limited features; manual setup for many functions

   5. Wave Payroll

   • Cost: $40/month + $6 per employee (tax states) OR $20/month + $6 (non-tax states)

   • Ease of Use: Easy

   • Best For: Entrepreneurs using Wave Accounting

   • Key Features: Integrates with Wave Accounting, direct deposit, automatic tax filing in select states

   • Limitations: Tax filing not available in all states

Customer Relationship Management (CRM) Systems

1. HubSpot CRM

   • Cost: Free plan, unlimited users

   • Ease of Use: Very Easy

   • Best For: Entrepreneurs wanting a professional, all-in-one CRM with room to grow

   • Key Features: Contact & deal tracking, email integration, task reminders, basic marketing tools

   • Limitations: Some advanced features require paid upgrade

   2. Zoho CRM

   • Cost: Free for up to 3 users

   • Ease of Use: Easy

   • Best For: Small teams needing mobile access and basic automation

   • Key Features: Contact management, lead tracking, mobile app, social media integration

   • Limitations: Free plan limited to 3 users

   3. Streak CRM (for Gmail)

   • Cost: Free

   • Ease of Use: Very Easy

   • Best For: Solo entrepreneurs who work mainly in Gmail

   • Key Features: Works inside Gmail, simple pipelines, email tracking

   • Limitations: Limited to Gmail users, fewer advanced CRM tools

   4. Bitrix24

   • Cost: Free plan, unlimited users

   • Ease of Use: Moderate

   • Best For: Entrepreneurs wanting CRM + project management in one

   • Key Features: CRM, project management, team chat, email marketing, phone integration

   • Limitations: Interface can be crowded and overwhelming for beginners

   5. Airtable

   • Cost: Free (usage limits apply)

   • Ease of Use: Easy

   • Best For: Entrepreneurs who like spreadsheets but want more flexibility

   • Key Features: Customizable CRM templates, spreadsheet/database hybrid, mobile app

   • Limitations: Lacks some built-in CRM automation features

Point of Sale (POS) Software

1. Square POS

   • Cost: Free app; reader ~$10–$50; ~2.6% + 10¢ per swipe

   • Ease of Use: Very Easy

   • Best For: Pop-ups, markets, small shops

   • Key Features: Payments, invoicing, inventory tracking, sales analytics

   • Insights Available: Tracks sales trends, shows top items, supports promo testing

   2. PayPal Zettle

   • Cost: Free app; reader ~$29; ~2.29% + 9¢ fee

   • Ease of Use: Easy

   • Best For: Small businesses using PayPal/Venmo

   • Key Features: Card + PayPal/Venmo payments, inventory, basic reporting

   • Insights Available: Simple sales tracking; less depth for experiments

   3. Clover Go

   • Cost: Reader ~$49; ~2.6% + 10¢ fee

   • Ease of Use: Easy

   • Best For: Food vendors, service providers

   • Key Features: Mobile app, receipts, sales reporting, expandable with other Clover products

   • Insights Available: Some reporting; stronger with upgraded Clover plans

   4. Shopify POS Lite

   • Cost: Included with Shopify plan (~$39/month)

   • Ease of Use: Easy

   • Best For: Online sellers also selling in person

   • Key Features: Syncs online + in-store sales, inventory, customer profiles

   • Insights Available: Clear promo tracking; see online vs in-person impact

   5. Toast (Starter Kit)

   • Cost: Hardware + software (from ~$0–$799)

   • Ease of Use: Moderate

   • Best For: Restaurants, cafes, food trucks

   • Key Features: Menu management, tipping, kitchen system integration

   • Insights Available: Tracks food item sales, promotion effectiveness, waste control

   6. Booker / Mindbody

   • Cost: From ~$30–$50/month

   • Ease of Use: Moderate

   • Best For: Salons, spas, service-based businesses

   • Key Features: Appointments, recurring billing, inventory, customer records

   • Insights Available: Tracks customer habits, service popularity, promotions

Here’s an example of how to set up a POS system with Square.

For some of you, this step is not separate from STEP 45, where you implement a full bookkeeping system. However, even if you do not have a full system, a critical beginning point involves establishing a basic system to track each of your sales (revenue) and each of your costs (expenses). Doing so is the only way to know if you are making a profit each month. Further, the longer you do this, the more you start to understand the patterns in your sales and expenses over time. This helps you recognize when sales levels are unusually low or high, or when an expense is out of line with what is normal.

The following will guide you in setting up a simple system to track revenue and expenses. By following this step carefully, you will be in better shape to create a bookkeeping system. It is fine to have a simple pen and paper system, or you might want to use Excel or Google spreadsheets. A third and popular option is to use a simple accounting software package like QuickBooks or Wave.

You need to create two journals (or spreadsheets), one for revenues or sales, and the other for expenses. You should organize these on a monthly basis, where each line represents a different transaction. Let’s start with revenue or sales. This means any money that your business brings in through the selling of goods or services. It does not include money you borrow or money you personally put into the business (although you do want to keep a separate record of both of these as well). Click here to view a simple example of how you might record each sale for a hat business.

You can create as many columns as you like, and particularly columns that reflect the nature of your business. So, you might also want to record the customer’s name, whether sales tax was collected (see STEP 36), whether the person paid a deposit, and whether the person paid by cash or credit card, among other information that could be important to track. The key initially is to keep it simple, and be diligent about recording every transaction.

For your expenses, it may be useful to set up a simple chart of accounts. This is just a list of your primary expense categories. Examples might be:

• 01 - Materials or ingredients

• 02 - Labor

• 03 - Packaging

• 04 - Depreciation on equipment and vehicles

• 05 - Rent

Your chart of accounts should assign a number to every type of expense. This will act as a “code” for all your transactions. Your expense ledger might initially look something like this (click here to view).

As with recording revenues, you certainly might want to add more columns. For instance, you could include columns to capture the name of the vendor or place where you spent the money, whether you do or do not have a receipt for the expenditure, or whether the expense is tied to a particular customer order.

It is vital that you keep all receipts, invoices, and supporting documents related to your revenue and expenses. At the end of each month, you can total all your revenues and all your expenses, subtract the expenses from the revenues, and determine your profit. If your customers pay by credit card, and/or you write checks or use a business credit card to pay expenses, then you can also reconcile the revenues and expenses with your business bank statement and your credit card statement. Keep in mind that this may miss any cash payments (see STEP 42 on how to handle this).

Finally, when they first start their businesses, many of our entrepreneurs fail to count their own labor as a business expense. They are not paying themselves anything. Yet they are doing most or all of the work in terms of producing the goods and services being sold. Instead, if they need money from the business, they just take it out. This is not a good practice. At a minimum, you want to track how much labor time you spent on making products or delivering services each week or month. Better than this is to treat your labor as an expense, decide on an hourly rate, and pay yourself. If you are not sure how much to pay yourself, consider the hourly rate you would pay if you hired someone else. The other option is to pay yourself a monthly salary (and divide the total number of items you produced into the salary to get an estimated cost per unit). Either approach gives you a much more accurate estimate of what each product or service is costing you to produce, which is helpful in setting your prices and determining your margins.

This step builds upon a number of earlier ones (STEPS 12, 13, 14, 15, 16, 17, 18, 35, 36, 37, 42, 43, 44). If you have approached these earlier steps systematically, then establishing your initial bookkeeping system should be relatively straightforward.

It is helpful to approach bookkeeping as a process. This process is illustrated here.

As you can see at the bottom, there are four basic steps to the process. The first is to generate a transaction trail, a paper or electronic record of every sale you made and every expense you have (see STEP 35). The second is to ensure all of these revenues and expenses are recorded (see STEP 43). Then financial statements have to be generated. This is frequently where you turn over all your financial records and bank statements to an outside bookkeeper or accountant, who will prepare the income statement, cash flow statement and balance sheet. The final step involves identifying patterns and insights from the statements that help you make better decisions going forward. You can learn over time how to interpret these statements, but a good accountant (one who will take the time), can sit down with you and help you interpret the statements and any underlying patterns. There are plenty of software packages available that are relatively simple to use, and require little formal accounting knowledge. A very popular one is QuickBooks (https://quickbooks.intuit.com/) and a similar but free one is Wave (which only starts to charge once your business gets to a certain size, and can be found at https://www.waveapps.com/). You can also do you bookkeeping, using an Excel or Google spreadsheet, especially in the early days when there are fewer transactions.

Now let’s talk about creating the bookkeeping system. In STEP 43, you should have created a way to track revenues and expenses. Your invoices and receipts from STEP 35 can be helpful in tracking these revenues and expenses, as can your business bank statements. However, you want to ensure you are capturing not just revenues and expenses paid by credit card or electronically, but also any customer payments or bills you paid using cash (see STEP 42).

In addition to tracking your revenues and expenses, there are six other major things for which you should keep up-to-date records. They include:

i. First, you want to keep a record of the total amount you (and any co-owners) have personally invested in the business.

ii. Second, you want to keep track of the amount of inventory you have on hand at the end of each month.

iii.  Third, if you buy any new equipment, computers, furniture or vehicles (capital equipment) during the year, keep a record of that.

iv.  Fourth, if you take any loans, or owe anyone any money, keep records that show how much you still owe at the end of each month.

v.  Fifth, if anyone owes money to you (e.g., a rent deposit, or a customer who owes you money), keep a record of that.

vi.  Finally, if you (or other owners) take money out of the business for personal use, you should keep track of how much you have taken out.

Your bookkeeping system (the data collected above) should enable you (or an accounting firm) to produce three financial statements: the income statement (or profit and loss statement), the cash flow statement, and the balance sheet. Each of these statements answers a critical and fundamental question for the entrepreneur. Further, each of them is one thing minus another, as follows:

• Income Statement—answers the question “am I making money?”. It is determined by taking revenues (sales) minus expenses;

• Cash Flow Statement—answers the question “can I pay my bills?”. It is determined by taking total cash in minus total cash out.

• Balance Sheet—answers the question “what is my business worth?”. It is determined by taking assets (things you own) minus liabilities (things you owe). If you subtract liabilities from assets, the difference is called owner’s equity, and it is a conservative indicator of the value of your business.

The tracking of revenues and expenses will produce the information needed to put together your income statement (also called a profit and loss statement). Here is an example.

For the cash flow statement, you need the records of everything on which you spent money during the month (this is money from the business, not your personal funds), and every source and amount of money coming into the business (this includes sales, but also loans or borrowed money, and money that you as the owner put into the business). Here is an example of a cash flow statement.

Finally, with the balance sheet, which is usually prepared at the end of the year, you need to have information on all the assets (things you own) in the business (e.g., cash in the bank, current value of any inventory you are holding at the end of the year, money owed to you by customers, deposits you have paid that you should get back, and what you paid for any capital equipment that the business owns—such as machines, computers, vehicles minus the amount you have depreciated this equipment so far). Here is an example of a balance sheet forn an early stage business (remember, it must balance so that Assets = Liabilities + Owner’s Equity).

Finding Suppliers

If you have a clothing store, a restaurant, or you make and sell a product, inventory is a key to your success. Having enough raw materials, ingredients and component parts, as well as finished goods, and having them at the right time, is key to making sales and also saving money. You must always be aware of how much product you have, how much you need, and where and how quickly you can get more. At the same time, you don’t want to be stuck with inventory, having inventory you don’t need or that won’t sell.

For many of our entrepreneurs, their initial operations are quite small and so they only buy in small quantities. These quantities are not large enough to enable the entrepreneur to purchase materials at wholesale prices or get volume discounts. So, they end up purchasing at retail stores like Walmart or Costco. This is a disadvantage, as they are purchasing at retail to sell at retail, which undercuts their ability to make decent margins on each item they sell. The goal should be to purchase everything at wholesale, or based on volume discounts, as soon as possible. Otherwise, you are competing with companies that start with a big advantage.

When you are ready to purchase things at wholesale, conduct a formal search for sources of supply. Start with an online search. So, if you make candles, search for ‘suppliers of candle wax’ and a number of wholesalers will show up. You can also attend a trade show or event for businesses in the same industry as you. Another approach is to check out trade associations for your products or join an industry group. More simply, you might talk with other business and get recommendations.

For some businesses, you may be able to get better prices on certain items by joining AmazonBusiness. A different platform is Faire Wholesale that features U.S. sources of supply to address small business needs. EK wholesale, which is based in Scotland, offers high-quality goods, and is integrated with Shopify. Wholesale Central in another platform offering a wide range of products. IndiaMart also offers a large range of options. In addition, there are search engines such as AliExpress where you can find thousands of wholesale products of medium- to low- quality, sourced from China. Another example is DHgate.

When you identify places to get inventory, be sure to carefully evaluate them in terms of:

• prices,

• quality of merchandise,

• minimum order sizes,

• delivery fees,

• lead time to get delivery,

• returns policies, and

• policies or perks of each seller.

Keep in mind that some of these options also have membership fees. It is also worth remembering that you may be able to negotiate different aspects of the purchasing arrangement with a given supplier. Remember, you can negotiate many aspects of your arrangements, so feel free to ask for what you need. Other helpful insights on finding and buying from wholesale suppliers can be found at: https://www.shopify.com/blog/wholesale-suppliers

Managing Inventory

If you sell multiple products (as opposed to services) then inventory is a big issue. Inventory ties up your cash, and represents risk (as you can be stuck with items that do not sell), so it must be carefully managed. When it comes to how much inventory of different items to purchase and keep in stock, you might want to consider a simple ABC inventory management system. While there are software packages available, you can do this yourself. With ABC (which stands for Always Better Control over your inventory), you divide the items you are selling into three categories or buckets (A, B and C).

Basically, you are grouping your products based on how much they are likely to contribute to the overall performance of your business. You can use different factors for grouping items, but one approach is to focus on how many units of an item you expect to sell, what the item cost you to make or acquire, and the markup or margin on this item. You may want to review our discussion of volumes and margins in STEP 16).

Group A would include your highest potential products, or products that have good margins or markups on them and that you expect to sell medium to high amounts. These are even more attractive if they are items that cost you more to make or acquire and that have higher prices and margins. Group B is an intermediate category and here you could include products having either i) medium volumes (in terms of number of units) with medium to low margins, or ii) high volumes with low margins. Group C consists of products from which you will not make much money, usually because they sell at a slow rate (fewer units) and the margins you make on each sale are moderate to low.

There are other ways to group items, but this approach can work. Here is a simple table you might want to create for use in grouping the various items you will be selling.

There is a general principle that has been proven time and time again. It basically suggests that up to 20 percent of your products will fall into Category A, while 30 percent of whatever you sell will fall into Category B, and 50 percent (or more) of the things you sell with fall into Category C. Called the Pareto Principle, it suggests that 20 percent of the items you carry will end up producing 80 percent of the money you make.

The message is clear. The entrepreneur who manages inventory based on this ABC approach will pay the most attention to carefully monitoring the Category A products. These are the items that you do not want to stock out of, and so you will buy or make the most frequently. This is where your real money will be made. It is where you might want to concentrate your marketing efforts as well. Alternatively, you are less concerned about stockouts of your Category C items, and may choose to re-purchase these items less frequently.

Again, you can do this by hand or using a simple spreadsheet. Once you are up and running, you should keep a close eye on the patterns in terms of what is selling the most and what has the higher margins. Over time, you might move products from one category or bucket to another. Finally, a number of free inventory management tools are also available that can help you tracking the state of your inventory. Examples include:

• Odoo: Has been rated as being good overall

• Square: Is especially good for retailers and restaurants

• Zoho Inventory: Is very good when you have very large inventories

• ABC Inventory: Is viewed as quite good for manufacturing and repair shops

• Sortly: Is rated high when it comes to a mobile inventory app with barcoding and scanning

More detail on inventory software for small businesses, and a spreadsheet for use in tracking inventory, can be found at: https://fitsmallbusiness.com/free-inventory-management-software/

You have a product, but you need a way to get it to your customers. What’s the best way to deliver or ship your product to your customers?

Establishing your delivery approach

There has been a significant trend towards customer’s preferring that products get delivered to their homes or selected locations. Taking into account your product, as well as your target audience, you will want to determine what makes the most sense for your business. Should you offer delivery at all, should you provide it yourself, or should you use a thirdparty delivery service?

If delivery is not something customers normally expect, you are likely better off not to incur the expense when you first start, unless you are attempting to use delivery as a means of differentiation from competitors. Even here, be sure the cost is worth the benefit in terms of increased sales.

Providing delivery yourself requires preparation. Not only do you need a properly equipped vehicle and insurance (if using a personal vehicle your insurance company will need to know it is being used for business purposes), but you will have fuel costs, labor time to make deliveries, a delivery and routing schedule, and contingencies should customers not be at home when you deliver goods.

Here are examples of issues an entrepreneur would need to consider if they were providing delivery of food items or items subject to spoilage:

- Range for delivery: make it clear to your customers the boundaries of your delivery service.

- Delivery vehicle: If you can afford to have a dedicated delivery vehicle for your business, that may be your best option if the volume of deliveries is high. However, it might take some time to get there. As an alternative, use your own vehicle, or allow your delivery driver to use their vehicle, making sure to track gas mileage so they can be reimbursed.

- Delivery driver: maybe this is you, or a family member to start out, or, if the volume of orders becomes substantial enough, hire an employee whose sole purpose is to deliver food.

- Mechanism of keeping food warm or cold. - Packaging in which items will be delivered.

- A delivery system: This can include a range of factors such as how items are loaded into the vehicle and in what order, a delivery route schedule, how customers are informed of delivery times, how completed deliveries are recorded, how to handle orders that include incorrect items or items damaged in transit, among other things.

Today, it is increasingly easy to find third party delivery services that can remove a lot of the delivery headaches. Some specialize in particular items (e.g., Uber Eats or Doordash for restaurant deliveries, Instacart for groceries) and some deliver a broader range of items (e.g., Roadie). With these, you need to look carefully at their performance records, fee schedules, and guarantees or commitments.

Establishing your shipping approach

Shipping items of all types and sizes has become relatively easy, affordable, and allows entrepreneurs to reach customers in locations far from wherever the entrepreneur is based. While a shipping strategy is a necessity for online businesses, it is increasingly important for lots of businesses that sell products from physical locations.

Start by defining your shipping strategy. Consider the types of products you sell, the average order size, your target market and where they are located, how quickly customers require the items, and your budget. Will you offer free shipping, charge customers for shipping, or have a combination of both? Will you handle shipping in-house or outsource it to a third-party logistics (3PL) provider? These third-party companies can handle all your order fulfillment needs for you.

Take into account such factors as packaging materials, weight, dimensions, shipping method, destination, and calculate your shipping cost. If you are shipping multiple different products, you’ll want to calculate the cost of each product as they may differ by size. The US Postal Service, as well as carriers like United Parcel Service (UPS) and FedEx have easy to use calculators to help you determine the cost of shipping.

Next you will choose a carrier. USPS, UPS, FedEx and DHL are popular options. Consider the reliability, affordability, coverage areas, speed, and tracking capabilities when deciding who to go with.

Once you have decided on a carrier, you’ll need to gather the necessary supplies to ship your products, this may include packages, tape, and the necessary labels. Be sure to package your products correctly and according to the carrier’s guidelines. This will ensure products get to your customer timely and safely. Consider also how you want the contents to arrive to your customer, and what kind of experience you want them to have in opening your package, called an “unboxing experience”. This will be the first impression your customer has of your products and your business. Do you want to include a thank you note, instructions about the product, or the story behind your business? Will the product be wrapped in brand-identifiable paper? Will you include QR codes leading to special offers, places to leave testimonials, or provide feedback? Consider the box and package an opportunity to build or deepen a relationship with your customer and set you apart from competitors.

After deciding what carrier to use, a system for shipping will need to be put into place. This may include setting up a shipping station in your home, office, or store, designating specific people to handle shipping, or specific tasks of shipping, and also putting protocol in place to ensure that customers receive their package on time. You may ship goods (or have them picked up for shipment) at a particular time each day. Whatever this process looks like, you will want it to be systematic. Also, the customer should receive tracking information after placing an order. This can be as simple as sending a picture of the tracking information from the shipping receipt to the customer’s email or phone number. Tracking info allows the customer to track their own package, and can also save you from liability when packages go missing, or arrive late.

The shipping process should be clear to your customers. Make sure that your website has all of the information regarding shipping, like the price, expected delivery date, return policy, and any other charges or restrictions.

Finally, here are some general questions to address when making decisions about both delivery and shipping:

1. Do your competitors charge for shipping or delivery?

2. Is it typical in your industry to charge for shipping or delivery? For example, in the food delivery industry, a delivery fee is almost always charged.

3. What would your customer expect? In some cases, free shipping or delivery will not only entice a customer to buy your product, but it will also bring them back in the future.

4. Distance. If most of your shipping is done locally, then offering free shipping may be more affordable.

5. Evaluate your pricing strategy. Does your strategy leave room for your business to absorb the cost of shipping? Or will this greatly affect your profit? You may consider raising the price of the product in order to offer free shipping to customers.

If the shipping and delivery processes seem daunting and you are not sure where to start, research to see how other companies do it, and be sure to consult people in your network running similar businesses. Ask how they structure their shipping, what carrier they use, if they charge for shipping, and anything else you may want advice on.

When you first start out, you are recording revenues and expenses, and putting together simple financial statements (perhaps with help from a bookkeeper or accountant). As you start to grow, and the number of monthly transaction you have increases, you may be ready to upgrade you accounting approach. Building on STEP 45, if your business has been profitable for one year or more, it may be time to move to a more sophisticated accounting software system.

It may also be time to move to what is called ‘double-entry’ accounting. In essence, it is a system that requires you to make two entries (one is called a debit and one is called a credit) each time you have a transaction (money comes in or money goes out). It is a checks and balances type of system that is more accurate and better enables the proper preparation of your company’s financial statements. Further, with double entry accounting you are recording transactions based on the five types of accounts they fall into:

• Asset accounts – capture things the business owns, such as cash, inventory, and equipment.

• Liability accounts – capture things the business owes, such as loans and accounts payable.

• Income accounts – capture sales or revenue coming into the business, including interest income and royalties

• Expense accounts – capture the costs of the business, such as labor, marketing, rent and utilities.

• Equity accounts – capture the money invested in the business together with any profits that have been reinvested in the business (retained earnings)

Most of our entrepreneurs start off with bookkeeping systems that rely on simple pen and paper or spreadsheets. Some start with a basic software package like Wave or QuickBooks. As you start to grow, you definitely will want to use some kind of software package. Wave or QuickBooks can do the trick, as they have added capabilities you can use when you are ready. Alternatively, there are a number of more advanced accounting software systems you can explore. Software systems can transfer information from your point-of-sale system to your accounting system seamlessly, and can integrate your bank account. Likewise, they can share information with the system your accountant is using if you pay an outside accountant to do your financial statements and taxes. The software can help you keep a tighter pulse on the health of your business, enabling you to monitor the profitability of your business, your cash flow, money you owe, money owed to you, and plan for upcoming financial needs. Most accounting systems can help you generate invoices and some can help you track inventory.

Factors to consider include:

• • What software does your accountant use, and what is compatible?

• • What meets your present and near-term needs?

• • Can you afford the subscription including needed add-ons?

• • What features do you need:

  • Basics – A way to track income and expenses and financial reporting.

  • Reporting – What reports does it offer and do they meet your needs?

  • Invoicing – Generates professional, customizable invoices for sales. Some offer options for online payments.

  • Extras – Do you need to track mileage? Do you want your info available via a mobile app? Is the software cloud based or by computer only? How many users does it allow?

Click here to see some of the available accounting software options described above.

Beyond the question of software, as your business starts to gain traction, and if you have enough activity, you might want to consider hiring a bookkeeper for twenty hours a week. Further, if you are using an outside accountant to prepare your financial statements and your business tax return, by now you want to make sure you are also getting the accountant to help you understand what the financial statements are telling you. Having meetings with the accountant every six months (or at least once per year) to go through your financial statements is one of the most valuable things you can do. The accountant can assist you in recognizing patterns, identifying key performance indicators, and uncovering irregularities. They can help you anticipate problems before they happen, and ensure you are ready for growth.