Several years ago, one of the biggest costs for small businesses was software. Accounting software? Expensive. Word processing and spreadsheets? Expensive. Contact management software? Expensive. Calendar and scheduling software? Expensive. Quite often, the total bill would be enough to make you wince in pain.

Since then, fortunately, we’ve moved on to a better era. With the advent of free open source software along with the growing maturity of the software industry as a whole, most of the key software needed for small businesses are now available for free – if you know where to look.

I speak from experience. As a small businessman myself, I use a mix of free and open source software for almost all of my business needs. Accounting, contact management, task management, word processing, spreadsheets, presentation software – I use free solutions for all of these and not only is my budget happy, I’m happy, too. In most cases, the software is as full-featured (for my needs) as the expensive software at the office supply store, plus I usually don’t have to wait around for bug fixes – it’s all updated regularly and upgrading the software is free, too.

Here are the key pieces of small business software I use. I’ve included both offline and online options for each category, since many small businesses do not have or necessarily need online access in the office.

Intuit QuickBooks Simple Start Free Edition 2009 (offline) or Quickbooks Online Edition (online)
I’ve been a fan of Intuit’s QuickBooks accounting software for years. Recently, Intuit has been offering very solid basic accounting packages for free to small businesses, under the idea that if a person’s business continues to grow, they’ll grow naturally into a larger, full-featured package. The basic packages themselves are loaded with features and easily take care of every accounting feature that a small business will need in the early years, plus it offers a very clean upgrade path to QuickBooks if you decide your business is outgrowing the software.

Calendar/Scheduling/Task Management
Mozilla Sunbird (offline) or Google Calendar and Remember the Milk (online)
I used Mozilla Sunbird as my scheduling and calendar software for many years with no problems and have only recently moved to Google Calendar, which is almost as full-featured and runs entirely within the web browser. Sunbird does a solid job of managing tasks offline, but for online management of the countless little things I need to do, I use the brilliant Remember the Milk.

Mozilla Thunderbird (offline) or Gmail (online)
Don’t let your internet service provider try to sell you an email package – there are tons of great packages available for free. Mozilla Thunderbird is a great free desktop client for email, but I use Gmail to simultaneously manage several email accounts all under one interface.

Word Processing
AbiWord or OpenOffice (offline) or Google Docs (online)
AbiWord may be the best word processing program out there, period, and it’s a free open source package. OpenOffice is a large collection of offce software (also a free open source download) that includes a very solid word processor. For online use, I often find myself using Google Docs when on the road – in fact, I’m composing this post in Google Docs.

Spreadsheets and Presentations
OpenOffice (offline) or Google Docs (online)
OpenOffice (mentioned above) includes wonderful packages for spreadsheets (very comparable to Excel) and presentations (comparable to PowerPoint) and it’s free. When you’re on the go, Google Docs provides basic versions of these tools in any web browser – I particularly find the Google Docs presentation software to be quite useful.

OpenOffice (offline) or Zoho Creator (online)
Need to create a simple inventory database? OpenOffice also includes a database tool that’s quite comparable to Access and can easily meet your needs. If you’re looking for an online solution, Zoho Creator makes it very easy to create a simple database and entry form online – for free!

Contact Management
Salesforce Personal Edition (offline) or Keepm (online)
As a small businessperson, you have suppliers to contact and customers to keep track of. Thankfully, there are many options for managing all of these contacts. Salesforce Personal Edition is a great free desktop contact manager, but I’ve come to use Keepm, which provides most of the same functionality online, accessible from anywhere, for free.

Why spend your hard-earned money on software packages that are loaded with many more features than you need when there are so many great free software solutions out there?

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