United States

Securities and Exchange Commission

Washington, DC 20549

FORM 10-QSB

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2008

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-52184

THE SMALL BUSINESS COMPANY

(Exact name of registrant as specified in its charter)

Delaware		55-0808106
(State or other jurisdiction of incorporation)		(IRS Employer File Number)

1380 Willow Street, San Diego, CA		92106
(Address of principal executive offices)		(zip code)

(619) 241-2844

(Registrant's telephone number, including area code)

674 Via de La Valle, Suite 226, Solana Beach, CA

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days Yes þ No ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No þ

APPLICABLE ONLY TO CORPORATE ISSUERS

As of December 31, 2008, 32,655,679 shares of our common stock were outstanding.

PART 1—FINANCIAL INFORMATION

Item 1. Financial Statements.

Balance Sheet

	December 31,			June 30,
	2008			2008

ASSETS

Current Assets
Cash	$	4,467		$	20,352
Inventory		17			17

Total Current Assets		4,484			20,369

Long-Term Assets
Publication Rights		25,000			25,000
Security Deposit		299			299
Property and Equipment, net		1,712			2,488

Total Long-Term Assets		27,011			27,787

Total Assets	$	31,495		$	48,156

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts Payable	$	26,719		$	41,734

Total Current Liabilities		26,719			41,734

Long-Term Liabilities
Notes Payable		170,339			222,695
Related Party Loans		149,497			82,630
Convertible Debentures - Net		271,164			271,164

Total Long Term Liabilities		591,000			576,489

Total Liabilities		617,719			618,223

Stockholders' Equity
Common Stock, authorized 500,000,000shares, par value $0.0001, issued and outstanding on Dec 31, 2008 and June 30, 2008is 32,655,679 and 25,725,679 respectively		3,266			2,573

Additional Paid-in Capital		1,509,620			1,324,735
Outstanding Options		25,000			25,000
Deficit Accumulated during Development Stage		(2,124,110	)		(1,922,375	)

Total Stockholders' Equity		(586,224	)		(570,067	)

Total Liabilities and Stockholders' Equity	$	31,495		$	48,156

The accompanying notes are an integral part of these statements

Statement of Operations

	Three Months Ended						Six Months Ended						2002 (Inception)
	December 31,						December 31,						to December 31,
	2008			2007			2008			2007			2008

Income
Consulting Revenue	$	2,127		$	28		$	2,163		$	1,476		$	281,919

Cost of Goods Sold		-			3			-			467			467

Gross Profit		2,127			25			2,163			1,009			281,452

Operating Expenses
General and Administrative		39,012			40,955			132,076			180,731			1,490,660
Advertising		30			-			9,420			4,965			106,666
Consulting and Professional Fees		23,808			13,127			42,675			65,065			546,138
Depreciation		388			385			776			770			6,517

Total Expenses		63,238			54,467			184,947			251,531			2,149,981

Net Loss from Operations		(61,111	)		(54,442	)		(182,784	)		(250,522	)		(1,868,529	)

Other Expenses
Interest Expense		(12,125	)		(10,969	)		(18,951	)		(29,887	)		(201,738	)
Embedded Derivative Costs		-			-			-			-			(53,843	)

Net Loss before Income Tax		(73,236	)		(65,411	)		(201,735	)		(280,409	)		(2,124,110	)

Provision for Income Tax		-			-			-			-			-

Net Income/(Loss)	$	(73,236	)	$	(65,411	)	$	(201,735	)	$	(280,409	)	$	(2,124,110	)


Basic and Diluted
(Loss) per Share	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.02	)

Weighted Average
Number of Shares		26,710,896			18,604,356			26,710,896			18,604,356

The accompanying notes are an integral part of these statements

Statement of Cash Flows

													November 26,
	Three Months Ended						Six Months Ended						2002 (Inception)
	December 31,						December 31,						to December 31,
	2008			2007			2008			2007			2008
Operating activities
Net (Loss)	$	(73,236	)	$	(65,411	)	$	(201,735	)	$	(280,409	)	$	(2,124,110	)
Adjustments to reconcile Net (Loss) to cash:
Common Stock issued for Services		8,850			-			8,978			59,000			542,709
Common Stock issued for Debt Conversion		-			-			-			-			133,542
Embedded Interest Expense for Debt		-			-			-			-			80,625
Embedded Derivative Warrant Issue Expense		-			-			-			11,803			53,843
Amortization of Prepaid Expense-Stock Related		-						-						8,603
Depreciation		388			385			776			770			5,746
Changes in Assets and Liabilities														-
(Increase)/decrease in Accounts Receivable		-			-			-			(2,146	)		-
(Increase)/decrease in Inventory		-			-			-			-			(17	)
(Increase)/decrease in Security Deposits		-			-			-			-			(299	)
Increase/(decrease) in Accounts Payable		(2,428	)		13,797			(15,015	)		(1,982	)		26,719
Net cash (used) by operating activities		(66,426	)		(51,229	)		(206,996	)		(212,964	)		(1,272,639	)

Investment activities
Purchase of Equipment		-			-			-			-			(7,846	)
Net cash provided by investment activities		-			-			-			-			(7,846	)

Financing activities
Proceeds from Notes Payable		29,105			28,708			144			11,045			222,839
Proceeds from Short Term Notes		19,047			29,151			66,867			42,649			149,497
Proceeds from Convertible Debentures		-			-			-			150,000			300,000
Proceeds from Subscriptions Receivable		-			-			-			-			25,000
Contributed Capital		-			-			74,100			-			74,228
Proceeds from sale of Common Stock		-			-			50,000			-			513,000
Net cash provided by financing activities		48,152			57,859			191,111			203,694			1,284,564

Net (decrease) in cash		(18,274	)		6,630			(15,885	)		(9,270	)		4,079
Cash and equivalents - beginning		22,741			447			20,352			16,347			-
Cash and equivalents - ending	$	4,467		$	7,077		$	4,467		$	7,077		$	4,079

Cash Paid For:
Interest	$	12,125		$	7,115		$	18,951		$	7,115		$	201,738
Income Taxes	$	-		$	-		$	-		$	-		$	-

Non-cash Activities:
Common Stock issued for Assets	$	-		$	-		$	-		$	-		$	25,000
Common Stock issued for Services	$	9,000		$	59,000		$	9,000		$	59,000		$	542,709
Common Stock issued for Debt Conversion	$	52,500		$	-		$	52,500		$	-		$	186,042
Common Stock issued for Prepaid Expense	$	-		$	-		$	-		$	-		$	110,000
Imbedded Derivative Warrant Issue Expense	$	-		$	11,803		$	-		$	11,803		$	134,468

The accompanying notes are an integral part of these statements

The Small Business Company, Inc.

(A Development Stage Company)

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

(December 31, 2008 and June 30, 2008)

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at September 30, 2008, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's June 30, 2007 audited financial statements. The results of operations for the period ended December 31, 2008 is not necessarily indicative of the operating results for the full year.

NOTE 2- GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 GENERAL ORGANIZATION AND BUSINESS

The Small Business Company, Inc. (“Company”) was incorporated in Delaware on November 26, 2002. The Company, based in Solana Beach, California began business as Optibiz, LLC, a California limited liability company and then converted to a Delaware corporation on November 26, 2002.

The Company is in its development stage even though it has produced limited revenues in proof-of-concept beta testing and business development consulting services. The company develops, packages and will market business improvement solutions for small business owners in the form of books, CD’s, and Business Coaching. The company will market these products through mixed media including national cable TV commercials.

NOTE 4. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

Accounting Basis

The statements were prepared following generally accepted accounting principles of the United States of America consistently applied. The Company uses a June 30 fiscal year end.

Cash and Cash Equivalents

Cash and cash equivalents include all short-term liquid investments that are readily convertible to know amounts of cash and have original maturities of three months or less. As of June 30, 2006 there were no cash equivalents.

Accounts Receivable

The Company analyzes current accounts receivable for an allowance for doubtful accounts based on historical bad debt, customer credit-worthiness, the current business environment and historical experience with the customer. The allowance includes specific reserves for accounts where collection is deemed to be no longer probable.

Advertising Costs

Advertising Costs are expensed as incurred.

December 31,		2008				2007
Advertising Costs		$	9,420			$	0.00

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Equipment

Equipment is stated at cost. Depreciation is computed using the straight-line method over their estimated useful lives, which for computer equipment is three years. Maintenance and repairs are charged to expense as incurred. Fixed assets consist of the following

	December 31,			June 30
	2008			2008

Equipment	$	7,846		$	7,846
Less Accumulated Depreciation		(5,746	)		(5,358	)
Equipment, net	$	1,712		$	2,488

Publication Rights

On March 14, 2008 the Company issued 500,000 common shares to acquire the marketing and publication rights to a book. The fair value of the stock issued on the date of agreement was $0.05 per share, accordingly the rights are recorded at $25,000.

Revenue Recognition

Revenues from services are recognized when there is persuasive evidence of an arrangement, the fee is fixed or determinable, services have been rendered, payment has been contractually earned and it is reasonably assured that the related receivable or unbilled revenue is collectable.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

Earnings Per Share

Basic earnings per share are computed by dividing net income by the average number of common shares outstanding during the period. Diluted earnings per share takes into consideration the potentially dilutive effect of common stock equivalents, such as outstanding stock options and warrants, which if exercised or converted into common stock would then share in the earnings of the Company. In computing diluted earnings per share, the Company utilizes the treasury stock method and anti-dilutive securities are excluded.

Outstanding options and warrants are considered anti-dilutive.

Stock Based Compensation

The Company accounts for its stock based compensation based upon provisions in SFAS No. 123, Accounting for Stock-Based Compensation. In this statement stock based compensation is divided into two general categories, based upon who the stock receiver is, namely: employees/directors and non-employees/directors. The employees/directors category is further divided based upon the particular stock issuance plan, namely compensatory and non-compensatory. The employee/directors non-compensatory securities are recorded at the sales price when the stock is sold. The compensatory stock is calculated and recorded at the securities’ fair value at the time the stock is given. SFAS 123 also provides that stock compensation paid to non-employees be recorded with a value which is based upon the fair value of the services rendered or the value of the stock given, whichever is more reliable. The Company has selected to utilize the fair value of the stock issued as the measure of the value of services obtained.

NOTE 5. OPTIONS AND WARRANTS

Options

The Company granted 500,000 common stock options as part of the employment agreement with the new officer. The details of the option agreement are still being negotiated as far as exercise price, vesting and other exercise consideration. Accordingly, the company recorded the value of the options at the current market price of $0.05 per share or $25,000.

Warrants

The Company accounts for non-cash stock-based compensation issued to non-employees in accordance with the provisions of SFAS No. 123 and EITF No. 96-18, Accounting for Equity Investments That are issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services. Common stock issued to non-employees and consultants is based upon the value of the services received or the quoted market price, whichever value is more readily determinable.

The Company has the following warrants outstanding as of December 31, 2008 and has recorded the cost associated with the issue of the warrants using the Black-Sholes option pricing model.

Reconciliation of Warrant Activity:

	Warrants
Warrants Outstanding at June 30, 2006		200,000

Plus: Warrants Granted		1,350,000
Less: Warrants Exercised		-
Less: Warrants Expired		(92,000	)

Warrants Outstanding at June 30, 2007		1,458,000

Plus: Warrants Granted		1,950,000
Less: Warrants Exercised		(200,000	)
Less: Warrants Expired		(808,000	)

Warrants Outstanding at June 30, 2008		2,400,000

Plus: Warrants Granted		1,060,000
Less: Warrants Exercised		-
Less: Warrants Expired		-

Warrants Outstanding at December 31, 2008		3,400,000

Outstanding Warrants as of December 31, 2008

Issue	Expiration	Exercise		Share
Date	Date	Price		Warrants
11/1/2006	11/1/2009	$	0.25		500,000
6/30/2007	6/30/2010	$	0.20		150,000
7/21/2007	7/21/2012	$	0.20		150,000
3/31/2008	3/31/2011	$	0.15		800,000
4/17/2008	4/17/2011	$	0.30		250,000
4/21/2008	4/21/2011	$	0.30		250,000
5/28/2008	5/28/2011	$	0.10		300,000
9/2/2008	9/2/2011	$	0.10		1,000,000
12/29/2008	12/29/2011	$	0.50		60,000

	Total				3,460,000

Black Sholes Variables:

	During	During
Black Sholes	Year Ended	Year Ended
Variables	30-Jun-2007	30-Jun-2008

Exercise Price	$0.075 -$ 0.25	$0.20 -$ 0.25
Risk Free Rate	3.72% - 4.95%	1.33% - 4.9%
Strike Price	$0.18 - $0.23	$0.09 -$ 0.20
Volatility	111.331896% - 126.713325%	111.331896% - 441.4%

NOTE 6. STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized 500,000,000 common shares with a $0.0001 par value.

During the six months ended December 31, 2008 the Company executed the following share transactions:

On August 25, 2008 the Company issued 50,000 common shares at .05 per share for $2,500 consulting services.

On September 2, 2008 the Company issued 1,000,000 common shares and 1,000,000 three year warrants exercisable at $0.10 per share at $0.05 per share for $50,000 cash.

	·	On October 1, 2008 the Company issued 300,000 common shares at $0.03 per share for $9,000 consulting services.

	·	On November 16, 2008 the Company issued to escrow 600,000 common shares as security for a $30,000 note.

On December 31, 2008 the Company authorized the issue of 5,250,000 common shares to convert $52,500 debt.

Prepaid Expense – Stock Related

On April 1, 2008 the Company issued 250,000 S-8 registered common shares at $0.20 per share for prepaid legal services and on June 30, 2008 the Company issued 400,000 S-8 registered common shares for prepaid advertising valued at $60,000. The Company has amortized amounts expenses in the current period.

	Dec 31,		Dec 31,
	2008		2007
Prepaid Legal	$	50,000	$	-
Prepaid Advertising		60,000		-

Subtotal		110,000		-

Less:
Amortization		9,747		-

Net Prepaid Expense Stock Related	$	100,253	$	-

NOTE 7. NOTES PAYABLE

On November 16, 2008 the company executed a $30,000 note at 10% per annum secured by 600,000 common shares and due August 16, 2009. As incentive the company issued 60,000 three-year warrants exercisable at $0.50 per share.

On December 31, 2008 the Company authorized the issue of 5,250,000 common shares to convert $52,500 notes payable.

NOTE 8. RELATED PARY LOANS

The Company President has paid expenses on behalf of the Company using nine different personal credit cards. These amounts are reported as Related Party Loans. The outstanding balance for the period ended December 31, 2008 is $149,497 and the year ended June 30, 2008 is $82,630.

Item 2. Management’s Discussion and Analysis or Plan of Operation.

The following discussion and analysis is provided to increase the understanding of, and should be read in conjunction with, our unaudited financial statements and related notes included elsewhere in this Report. Historical results and percentage relationships among any amounts in these financial statements are not necessarily indicative of trends in operating results for any future period. This report contains “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The statements, which are not historical facts contained in this Report, including this Management’s discussion and analysis of financial condition and results of operation, and notes to our unaudited financial statements, particularly those that utilize terminology such as “may” “will,” “should,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology are forward-looking statements. Such statements are based on currently available operating, financial and competitive information, and are subject to various risks and uncertainties. Future events and our actual results may differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, dependence on existing and future key strategic and strategic end-user customers, limited ability to establish new strategic relationships, ability to sustain and manage growth, variability of operating results, our expansion and development of new service lines, marketing and other business development initiatives, the commencement of new engagements, competition in the industry, general economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the service requirements of our clients, the potential liability with respect to actions taken by our existing and past employees, risks associated with international sales, and other risks described herein and in our other filings with the Securities and Exchange Commission.

The safe harbor for forward-looking statements provided by Section 21E of the Securities Exchange Act of 1934 excludes issuers of “penny stock” (as defined under Rule 3a51-1 of the Securities Exchange Act of 1934). Our common stock currently falls within that definition.

All forward-looking statements in this document are based on information currently available to us as of the date of this report, and we assume no obligation to update any forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward looking statements.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes appearing elsewhere in this report.

OVERVIEW

The Small Business Company was incorporated in the State of Delaware on November 26, 2002, and acquired on the same date from Optibiz, LLC, a California limited liability company formed August 14, 2002, all of Optibiz’s assets, primarily the “DARE Process”, in exchange for the issuance of an aggregate of 13,000,000 shares of our common stock and no other consideration. Our product line is based upon our patent-pending knowledge base - the DARE Process (Decide, Analyze, Realize and Evaluate); which process has been formatted into a series of books, high margin CD’s and internet downloads. Since inception, we have been developing and testing the DARE Process series of business improvement solutions for small business owners. We intend to complement these tools with a global network of licensed business coaches and DARE Success coaches who will provide subscription based personalized assistance to micro-entrepreneurs (sole-proprietors to ten employees).

Our principal executive offices are located at 1380 Willow Street, San Diego, California 92106. Our telephone number is (619) 241-2844, and our facsimile number is (619) 241-2847.

OUR BUSINESS

We have been developing and testing a series of business improvement solutions for small business owners called DARE products and have been in the same industry since inception.

The foundation of our solution is the “DARE Process”: Decide, Analyze, Realize and Evaluate. This process addresses many problems facing many small businesses. Our initial products are based on the DARE Process: interactive CD-ROMs targeted to home based and small businesses; and, our books, co-authored by our founders David Larson and Stuart Schreiber, “The Best Small Business Book Ever Written”, “DARE 2 Market Your Small Business”, “DARE 2 Start Your Small Business”, and “DARE 2 Start Your Home Based Business.

Since our inception, we have:

•	Researched the market for small business solutions, identified unmet need in the marketand created business model and plan.

•	Created the DARE Process.

•	Written and published four books

•	Test marketed the concept with additional consulting activities to the small businessmarket.

•	Authored, developed, and created four CD-ROMs.

•	Built out two web sites.

•	Developed a framework for a proposed national network of small business coaches

•	Begun marketing activities to sell our books and CD-ROMs over the internet and oncable television.

DARE PROCESS

Our objective is to become the leading source of small business solutions for small companies. Our business is based upon the DARE Process, which our founders created from their sixty-five cumulative years of small business experience and presented in our book, “The Best Small Business Book Ever Written.” The premise of the four-step DARE Process is to create a simple method for small business owners to address the problems inhibiting the success of their companies. DARE stands for Decide, Analyze, Realize, and Evaluate.

“DECIDE”

We believe that small business owners must make a conscious decision that they need to improve their business and their quality of life. Typically, our solution asks the customer a series of questions to see if the customer is ready to commit to make significant changes in a particular area.

“ANALYZE”

Our solutions teach small business owners how to question and diagnose the specific problems inhibiting the success and growth of their business. Our solutions provide analysis tools and other resources to determine the cause of the problems of the customer's small business.

“REALIZE”

Based on findings from the Analyze step, the Realize step provides business owners with a process to develop and initiate new programs that are designed to re-energize and grow the customer's small business.

“EVALUATE”

Under step four, business owners are presented with a process to measure the success of each new Realize initiative. Then, they adjust and fine-tune to constantly stay ahead of their competition.

OUR PRODUCTS AND SERVICES

CD-ROMs. Our primary products consist of our “DARE to Succeed in Your Small Business” CD-ROM series. This first and master CD-ROM is an interactive, stand-alone software product that is comprised of the DARE Process tools, including analysis forms, realize sheets, sample agreements and contracts, one-page plans, and various Internet links. This CD-ROM is a superset of our book, “The Best Small Business Book Ever Written.” Forms and worksheets are provided using Microsoft Word and can be completed either on screen or by hand. We charge $69.95 plus shipping and handling for CD-ROMs and offer a free 30-day trial.

Books. We also sell our books that include forms, checklists and other tools for analyzing, realizing and evaluating the results. The books also encourage readers to visit our web site or phone a toll-free number to obtain CD-ROMs. We charge $14.95 plus shipping and handling for our books and offer a free 30-day trial.

Coaches. We intend to qualify, train and license a network of DARE Success Coaches.

At this time we do not foresee any expected purchase or sale of plant and significant equipment.

MANUFACTURING

We manufacture our CD-ROMs and books using third-party manufacturing facilities. To date, we have self published our books and developed our CD-ROMs through a third party vendor. We have not yet entered into any agreement with respect to the mass manufacture and production of either our CD-ROMs or our books. We believe that there is an adequate supply of large and well-established CD-ROM producers and book printers, all with competitive prices.

OUR MARKET

We have identified ten industry-specific markets for small businesses that we believe have need for our business consulting solutions:

• Home-based businesses

• Beauty salons/spas

• Laundry services

• Realtors

• Child day care services

• Retailers

• Accounting services

• Insurance agencies

• Auto repair and maintenance

• Food and beverage establishments

We have identified several markets for these businesses where specific business needs, rather than industries, need to be addressed:

• Marketing

• Planning

• Financing

• Starting a Business

• Managing a Business

• Manufacturing

• Operation

• Engineering

MARKETING

We market our products through direct marketing initiatives, public relation campaigns, alliances with small business associations, and partnerships with key service providers to small businesses. Our direct marketing initiatives include TV commercials, opt-in mail, online, print and media. To date, we have produced two 30-second TV commercials that have been aired on nationwide cable television. However, due to lack of available financing, these TV commercials have not aired during this quarter. Upon successful acquisition of additional financing, we expect to resume the airing of these TV commercial spots in the near future. In June of 2008, we entered into contracts to provide for media placement services, “e-commerce” web site maintenance, and internet click-through advertising on web sites. Performance issues arose regarding the efficacy of the performance of the service providers, and we subsequently terminated those contracts and entered into other agreements with third party providers of those and similar services.

CONSULTING AGREEMENTS

We have entered into agreements with outside vendors/contractors on a specific per job basis to provide a variety of services including marketing, business development, graphic design, IT support, video production, commercial production, CD development, and financial advisory services. These agreements are for specific tasks and we have no term contracts in place at this time. The Company deems all such contracts to be made and performed in the normal course and scope of its business and are otherwise non-material.

COMPETITION

The market for small business solutions is rapidly evolving, and competition for customers is intense. We believe that the principal competitive factors for companies looking to provide solutions to small businesses are cost, and ease of use and implementation, and brand recognition. Although we are not aware of any competitor whose primary focus is on CD-ROMs as opposed to books, there are several publishing and media companies who are focused on delivering small business solutions, such as Entrepreneur Media and E-Myth.

We also compete with traditional publishers such as John Wiley & Co. (the “Dummies” series), Pearson PLC (“Idiot Guides”) and Adams Media (“Streetwise”). The Dummies series often provides a CD-ROM with their book as a general business forms addition rather than a process-based solution. It is possible that these other publishers could create a CD-ROM version of their respective books in order to compete with “DARE to Succeed in Your Small Business.”

Virtually all of our existing and potential competitors have longer operating histories, greater name recognition, larger customer bases, and significantly greater financial, technical and marketing resources than us. Such competitors are able to undertake more extensive marketing campaigns for their brands and products, adopt more aggressive pricing policies and make more attractive offers to small business associations and strategic partners. It is possible that small businesses may determine that the other small business solutions are more desirable than ours.

INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS

We have received copyright registration for The Best Small Business Book Ever Written (TX 5-915-046), DARE 2 Market Your Small Business (TXu1-290-967), DARE 2 Start Your Small Business (TXul-296-949) and DARE 2 Start Your Home Based Business (TXul-296-947). We have also applied for copyright registration for two additional books and have filed for a patent on our DARE Process. An Application for a Utility or Design Patent was filed for the DARE Process on July, 26, 2004. The U.S. Patent and Trademark Office confirmed receipt of the filing as Published Application Number 20050055234. We are awaiting confirmation of final patent approval for its four-step problem-solving process, which we anticipate we may receive in 2009, although the exact date is uncertain. We will rely on trade secret rights, confidentiality agreements and procedures and written arrangements to establish and protect our proprietary rights with respect to our publications. Despite our efforts, third parties could attempt to copy or otherwise obtain and make unauthorized use of our products or independently develop similar products.

Certain legal standards relating to the validity, enforceability, and scope of protection of certain proprietary rights are still uncertain, and it is possible that there may be no future value to any proprietary rights we now claim. It is also possible that the steps we may take to protect against misappropriation or infringement will be unsuccessful. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation might result in substantial costs and diversion of resources and management attention. Furthermore, it is possible that our business activities may infringe on the proprietary rights of others, or that other parties may make such a claim.

EMPLOYEES

As of December 31, 2008, we have three employees, our CEO and COO and an office manager. We do not anticipate that any future employees will be covered by an ongoing collective bargaining agreement and that our relationship with our employees will be good. Although we have experienced no work stoppages and believe our relationships with our employees are good, we could be unsuccessful in attracting and retaining the persons needed. None of our employees are currently represented by a labor union.

SIGNIFICANT ACCOUNTING POLICIES

Accounting Basis

The statements were prepared following generally accepted accounting principles of the United States of America consistently applied. We use a June 30 fiscal year end.

Cash and Cash Equivalents

Accounts Receivable

Advertising Costs

Advertising Costs are expensed as incurred.

December 31,	2008		2007

Advertising Costs	$	9,420	$	0.00

Use of Estimates

Equipment

	December 31,			June 30
	2008			2008

Equipment	$	7,846		$	7,846
Less Accumulated Depreciation		(5,746	)		(5,358	)
Equipment, net	$	1,712		$	2,488

Publication Rights

Revenue Recognition

Income Taxes

Earnings Per Share

Outstanding options and warrants are considered anti-dilutive.

Stock Based Compensation

RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

Three months ended December 31, 2008 vs. Three months ended December 31, 2007.

Revenues: We had $2,127 in consulting revenues for the three months ended December 31, 2008 as compared to $28 in consulting revenues for the same period in 2007. Our history of producing limited revenues is due our initial focus on acquisition, research, development and beta testing of our products; secondly, to identifying and developing a marketing plan to sell our products and consulting services; and lastly implementing the marketing and advertising plan. In June of 2008 we began actively marketing our CD-ROMS and books over the internet via an e-commerce web site and “click-through” advertisements on search engines, and through thirty second television commercials on national cable television. These efforts, while continuous, are in the preliminary and formative stages, and as such, we believe that we will see returns on our marketing efforts in the next fiscal year, as we develop and expand our marketing and sales efforts. Additionally, we changed service providers for some of our internet advertising services in October, 2008, based upon what we perceived to be performance related issues with a vendor. We have since retained other internet advertising service providers.

Operating Expenses: Our operating expenses for the three months ended December 31, 2008 increased by $8,771, to $63,238, from $54,467 for the comparable period in 2007. This increase was due to completion of the acquisition, research and development and beta testing stages of our products, as well as the identification and deployment of our marketing plans. Other factors that increased operating expenses approximately for the same period in 2007 were associated with book design and printing and the re-engineering and production of our compact discs, the engineering of our data base and marketing costs related to production of two television commercials.

Net Loss: Due to the factors set forth above, our net loss increased $7,825 to $73,236 for the three months ended December 31, 2008 as compared to a net loss of $65,411 for the comparable period in 2007.

OFF BALANCE SHEET ARRANGEMENTS

None.

Item 3. Controls and Procedures.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of disclosure and controls and procedures. As of the end of the period covered by this Quarterly report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) of the Exchange Act). Based on this evaluation, our chief executive officer and treasurer, the sole officers and directors of the company, concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms

Changes in internal controls over financial reporting. There was no change in our internal controls, which are included within disclosure controls and procedures, during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls

Management is responsible for establishing and maintaining adequate internal control over financial reporting. The purpose of the Company’s establishment and maintenance of such controls is to identify material weaknesses that have more than a remote likelihood of leading to a material misstatement in the financial statements. While identifying control deficiencies and significant deficiencies represents an important component of management's assessment, the overall focus of internal control reporting is on those items that could result in material errors in the Company’s financial statements. As of the end of the period covered by this report, our chief executive officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15b under the Securities Exchange Act of 1934. Based on his review of our disclosure controls and procedures, he concluded that our disclosure controls and procedures are effective in timely alerting him to material information relating to us that is required to be included in our periodic SEC filings. Management is in the continuing process of analyzing and adopting new policies and procedures to improve the design and operations of our disclosure controls. These efforts include identifying and tasking available staff to better segregate duties; the review and consideration of more sophisticated software and other office procedures that would aid us in timely flagging potential material information that requires staff and management review and possible action prior to filing; and consideration of hiring additional staff geared towards review of our financial data and reporting. We continue to train to our existing staff in order to achieve reasonable assurance regarding the reliability of the financial statements

We also expect that through the natural learning process management will achieve efficiencies as they complete future assessments of internal control. For example, management's knowledge of the prior year's assessment results will impact its current year risk-based analysis of the significant accounts and the related required documentation and testing that may be necessary. Management may determine that certain controls require more extensive testing, while other controls require little testing in a given year. Additionally, in reaching its conclusion of reasonable assurance, management may find it appropriate to adjust the nature, extent and timing of testing from year to year - in some years delving deeply into selected internal control areas while performing less extensive testing in other areas and changing that focus from year to year and quarter to quarter.

In any event, we will, consistent with Section 404 of the Sarbanes-Oxley Act of 2002, implement reasonable assurance, risk-based reviews of our internal financial reporting controls; evaluate internal control deficiencies; disclose material weaknesses; review information technology issues; and seek communications with auditors in order to periodically review our control procedures, and create new controls to address perceived material issues regarding financial reporting,PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On October 1, 2008 the Company issued 300,000 common shares at $0.03 per share for $9,000 consulting services.

On November 16, 2008 the Company, without any general solicitation or advertising, entered into a straight promissory note with Margaret Hansler. In exchange for thirty thousand dollars ($30,000.00), the Company agreed to repay to Ms. Hansler her thirty thousand dollar ($30,000.00) principal and ten percent (10%) annual interest by August 16, 2009. Further, in the event of the Company’s default repaying the note to Ms. Hansler, the Company and Ms. Hansler agreed that the debt and interest would be convertible into six hundred thousand (600,000) restricted common shares of the Company. As additional consideration for entering into the note, the Company issued to Margaret Hansler sixty thousand (60,000) three-year warrants, expiring on November 16, 2011, to purchase restricted securities exercisable at fifty cents ($0.50) per share. No underwriting, discounts or other commissions were involved in this transaction or payable as a result thereof. We relied upon Section 4(2) of the Securities Act, which exempts from registration "transactions by an issuer not involving any public offering."

The warrants are exercisable at any time during the three-year period beginning on November 16, 2008 and ending at 5:00 P.M. on November 16, 2011 by the warrant holder executing and delivering to the Company a formal written form entitled Notification of Election to Exercise Warrants.

The funds received by the Company were used for general working capital and do not reflect a material change in the use of proceeds described in our previous filings or prospectuses, or payments to any shareholder owning 10% or more of any class of equity securities or to any affiliate or control person of the Company.

On December 31, 2008 the Company authorized the issuance of 5,250,000 common shares to convert $52,500 debt on a note payable.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

As of February 9, 2009, the Company’s principal executive offices changed from 674 Via de La Valle, Suite 226, Solana Beach, CA, to 1380 Willow Street, San Diego, CA 92106.

Item 6. Exhibits

Item No.	Description	Method of Filing

31.1	Certification of David Larson pursuant to Rule 13a-14(a).	Filed electronically herewith

32.1	Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. § 1350 adopted pursuant to Section 906 of the SarbanesOxley Act of 2002.	Filed electronically herewith

SIGNATURES

Dated: December 31, 2008

/s/ David Larson

David Larson, President, Chief Executive Officer, and Director

SMALL BUSINESS CO 10-Q