In recent years, people are looking for a new compact THz source with high emission power, one potential choice is to build small accelerator with Smith-Purcell radiation. The main difficulty is how to obtain high quality electron beam. In this paper, the beam dynamics design of a compact THz source is presented. The electron beam is produced by an electron gun and compressed by permanent magnets. The electron gun is similar to the Shanghai EBIT, but permanent magnets are used, instead of the superconducting magnets in Shanghai EBIT. With this design, we can reduce the size and cost of the whole device. Poisson/Pandira was employed to simulate and optimize the magnetic field. Egun was used to simulate the beam trajectories from the electron gun to the collector. Within 2 centimeters around the center of longitudinal magnetic field, the calculation showed that the beam satisfies to our design aim.