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Level 2: Intermediate

Money basics for a small business

6 min read · Before you start: Lessons on budgeting, tax and your payslip · Updated 26 October 2026

Key terms in this lesson: emergency fund · VAT · cash flow (all defined in the glossary)

Many people in the Caribbean earn from a side business, a trade or a shop. Good money habits turn a busy business into a profitable one. This lesson covers the basics. It is not legal or tax advice.

1. Separate business and personal money

Open a separate account for the business and pay yourself a set amount on a set day. Mixing the two makes it impossible to know whether the business is really making money, and makes tax time harder.

2. Register and know your obligations

• Register your business name or company with the Companies Registry as required for the type of business you run.
• Register with the Board of Inland Revenue for income tax, and keep records of income and expenses.
• If you employ people, register for NIS and other payroll obligations. Self-employed people also have NIS obligations.
• VAT: VAT is charged at 12.5 percent. Published sources differ on the registration threshold. The Ministry of Finance page we read states TT$500,000 in sales over twelve months (or forecast sales of that amount), while the Budget 2027 summaries by PwC and EY list TT$600,000 in commercial supplies over twelve months with no change. Check the official pages linked below to see which figure applies to you, and ask the BIR or an accountant about your situation.

Rules and thresholds change. Confirm each one with the official body.

3. Keep simple records

• Keep every receipt and invoice.
• Write down each sale and each cost, with the date.
• Once a month, add them up: money in, money out, and what is left.

4. Profit is not the same as cash

You can be profitable and still run out of money. Suppose you sell goods worth TT$20,000 this month but customers pay in 30 days, while you must pay suppliers and wages of TT$15,000 now. On paper you made TT$5,000. In your bank account you are TT$15,000 short until customers pay. This is called a cash flow problem, and it is a common reason healthy businesses fail.

Protect cash flow by invoicing quickly, following up late payers, asking for deposits on big orders and keeping a small cash cushion.

5. Price to cover all costs

Price is not just "what others charge". Count:

• Direct costs of each item (ingredients, materials, packaging).
• Fixed costs that stay the same (rent, phone, insurance, loan payments).
• Your own time. If you pay yourself nothing, the business is not covering its real cost.

Break-even example

A baker sells cakes for TT$100 each. Ingredients and packaging cost TT$60 per cake, leaving TT$40 per cake to cover other costs. Fixed costs are TT$3,000 a month.

1. Break-even cakes = 3,000 / 40 = 75 cakes a month.
2. Every cake after the 75th adds TT$40 of profit.

If 75 cakes a month is unrealistic, the owner has to look again at the price, the costs or the plan.

6. Plan for tax and for slow months

Set aside a share of every payment for tax, and keep a reserve for slow months. Treat the business emergency fund as separate from your personal one.

7. Borrowing carefully

Borrow for things that earn money, such as equipment that increases output, not to cover everyday losses. Work out the repayment first and check it against cash flow, not hoped-for sales. See reading a loan offer.

Common mistakes

• Not knowing your real costs.
• Mixing personal and business money.
• Giving credit with no follow-up.
• Spending all the cash that comes in, with nothing set aside for tax.
• Ignoring registration and tax obligations until a problem appears.

Run your own figures with the loan payment calculator on the tools page.

Test yourself

Mark this lesson as done

Not financial advice. This lesson is general education only. See our editorial policy and disclaimer.