I’m not the first to note how small businesses can utilize a variety of tools to make themselves more productive. Many businesses, large and small, are using free or low cost web based tools to make their lives easier and more productive. In the Internet age, it’s considered essential to take advantage of these tools if you want to gain an edge on your competitors, and free up your capital to spend on business development.

No longer do businesses have to spend thousands of dollars on information technology infrastructure, expensive servers, or on overpriced licenses for software. The acceleration of lightweight tools being produced by startups in New York, Silicon Valley, and in enclaves across the country.

Cloud computing is a broad term that can encompass many tools and services available across the Internet. Small startups like Evernote and Dropbox, large companies like Microsoft and Apple, and mid-sized companies who have been in the game for a long time like 37signals offer a broad array of tools that allow small businesses to work and store their information online.

Evernote is a simple notepad tool that allows you to take notes and store information that you deem important. Not unlike how many would have used Notepad or TextEdit. The genius behind Evernote, however, is its ability to sync across multiple platforms, and be available to multiple users of Evernote. I can write out notes on my laptop, access them while I’m on the road via the iPhone app, and grant access to others on my team who can read and edit the same notepad. Microsoft and Apple are now offering similar tools in Microsoft’s OneNote and Apple’s iCloud service.

Dropbox is a relatively new service that allows you to upload and store large files on their servers. Have a big PowerPoint presentation or a large Photoshop file that you’ll created at the office, but will need at home or at another location? You can upload the file to your Dropbox folder, which is stored conveniently on your desktop or in your toolbar, and be able to access the file anywhere you’re logged into your Dropbox account. Have a file you need to share with members of your team spread out across the country? You can create a public URL that allows people to simply click a link and download the file directly to your computer. Box.net is a similar service, and services customers both large and small. Box.net has grown into a huge company, currently calling 77% of Fortune 500 companies clients.

In the past, small businesses spent thousands of dollars to accountants and lawyers to keep their books and pay their taxes. Now, there are a number of web-based services that allow companies to keep their books and their finances organized. New startups like Freshbooks allows companies to issue invoices and keep track of billing online, and established organizations like Inuit offer a variety of online based services to help keep their finances in order. 

Word Processing is an industry that has long been dominated by Microsoft, but has recently been challenged by Google, who offers a variety of cloud services with their Google Docs service. Microsoft, however, has recently released Office 365, an innovative and easy to use cloud computing service that allows you to access your Word documents and Excel spreadsheets from wherever you work, with all of your documents stored in the cloud.

Square is a service founded by one of the co-founders of Twitter. It turns any smartphone or tablet into a mobile credit card reader, and allows businesses to bypass the expensive and onerous steps needed to accept credit cards. So far, it’s been adopted by over 800,000 businesses, and processes $2 billion a year in transactions. This lightweight, simple technology has made doing retail business much more inexpensive, and opens up the door to even more possibilities of innovative technologies to help small businesses operate.

When companies utilize these low cost tools to make their businesses more productive, helps spur the economy, and frees up their capital to spend on what many might consider to be more important expenditures. It cuts the red tape and allows small businesses do what they do best.