Is going into small business talking small? The answer is yes and no, depending on how, what and where you are establishing the business. Some small businesses can really be capital-intensive so you have to put up a decent sum to get it up and going. You can invite friends to invest in the business. They might come in if the business idea is promising enough.

Small business in the real physical world is not for guys with really “small” capital. You will need a space that will house your small business. However small that may be, it still costs you money in monthly or weekly rentals. And there are utilities like communications (letters and telephone, at the very least), electricity and water. That is why start-ups like to think small for their first ventures.

Even with a good business idea and capital investment counterpart from friends, miscalculated assumptions in the business plan can easily shoot the small business down. Professional help on business planning and during the initial stages of the operation can help and take the business afloat but it should start to make real profits within 3 years or under. Enough working capital should be handy for at least 2 production cycles so that sales in the first cycle can assuredly cover a third as your buffer cycle. A dynamic mode of management and operation is vital for the first year of operation as there are real “new” discoveries that could not be covered and known specifically in the business planning phase.

Shifts in the industry environment are another thing to be vigilant about. In the business plan, these are considered as “ifs” in the list of assumptions but under the general category of the “yet unknown.” Allowances in cash-readiness and operational adjustment readiness cover this area but are harder to confront in actual operational mode than when it was tackled in business planning. Hard facts have real impacts.

That is how it is in the real physical world of business. When you get wounded, it really hurts. It is not for the faint-hearted.

Small businesses on the web, however, are an entirely different thing. They have as much chances as large-capital operations. The key success factor in an online small business is the business idea. Web business technologies abound in the internet. It is just a matter of marrying the strengths of a few of these web technologies and the small but knowledgeable start-up can suddenly grow big. Examples of these businesses are social networking websites. They get to earn millions in advertisements alone.

But beware of scammers on the web. They are also more deadly than in the real physical world. Don’t forget to always bring your common sense with you.