In today's international competition, the "cost first" strategy is universally adopted by enterprises, thus low cost, high quality and quality service have become the main goals for most enterprises. Among these goals, low cost is a basic target. How to retain quality while keeping costs under average is a goal for which every person in managerial position strives. Internal Control System provides an effective managing mode for the daily work of management. The authors analyze the application of Internal Control System in small businesses based on their investigation into the internal control system of a certain iron plant.