If you believe that the worst has come to the US and world economies, then perhaps you believe the next 5 years is filled with a joyful rise in the stock market, endless consumer purchasing, extreme real estate speculation — you should stop reading this article right now. I’m not going to try to convince you otherwise!

Otherwise, if you believe that we’re in bad times, and headed for something nastier, I invite you to take this time to identify what things you need to change in your life to thrive during this time. Here are a few things you can do to help your business survive (or even start) during a period of duress:

• Spend less.
  This may sound obvious, but you need to stop spending so much. You may think you’re frugal now, but there are always things you don’t need that you keep buying. Was it necessary that you brought on all those extra consultants? Do you really believe that those fringe benefits are directly contributing to your profitability? Make some needed cuts, and start developing a “Do I really need this?” mentality.
• Start saving money.
  Cash is king in a world that is suffering. If you can manage to save up extra money now, you’ll be able to buy up assets and resources when things hit rock bottom. There won’t be much (if any) financing when everything is down! You’re going to need cash. Imagine when you have an opportunity to buy that $950,000 3-bedroom house that will eventually drop to $350,000. Or, when BMW and Mercedes starts to offer extremely steep discounts to clear their inventory because no one else is buying. If you don’t have cash when the deals come knocking, you’re missing out.
• Use lower cost alternatives to services.
  In many cases, we’ve standardized on using nothing but the best when it comes to services and products for our businesses. But there are a tremendous amount of alternatives to everything we use, many of which offer similar (if not superior) quality, but for a drastically lower cost. Seek them out, because you might just be surprised to find out that you can barter a little more with someone else.
• Bank with a reputable bank.
  Banks like Wells Fargo and Bank of America will not go under. Why? Because they take on a much lower quantity of high risk debt. Seek out banks that have a track record of taking on less risk, but provide higher interest rates. If you look carefully, you’ll find banks offering 3.5% and above for savings accounts (ING Direct), and considerably more for money market accounts. Why do you have tens of thousands of dollars sitting in a traditional savings account earning less than the historical average of inflation?
• Avoid rising above FDIC limits in your accounts.
  I don’t care who you are, but putting more than $100,000 in a checking, savings, or money market account is just asking for trouble. The FDIC insures accounts up to $100,000 per account type per bank. Anything over that, you risk losing (and at a minimum, at pennies on the dollar) when the bank fails and needs to be bailed out. There are billions of dollars in accounts that go uninsured because they’re over the limits. Take the time to setup additional accounts and split your capital up across them. Like the cliche says, “Don’t put all your eggs in one basket.”
• Always put 20% or more down when buying property.
  I know it seems appealing to buy that car for 0 down, or that piece of property for only 5% out of pocket. Unless your payments are considerably less than 20% of your monthly cash flow, you’re making a huge mistake. Should your cash flow come down, you’re going to be living in hell. Putting 20% or more down makes you truly think about what it is you are buying, and it increases your chances of financing. Some lenders are actually requiring 20% down now.
• Help others save money.
  If you build in the ability for people to save money into your products, they’ll buy your product, even during a recession or time of economic stress! Would you pay $5 for an iPhone application that helps you find the cheapest gas nearby? What if your services were all by phone and the Internet, instead of continually requiring your clients to come into your office? Perhaps you can even offer your product for 50% cheaper than your best competitor, and spin it as saving 50% to your clients.
• Telecommute more often, even with your clients.
  Work with your clients, vendors, employees, and consultants to telecommute more often. Everyone benefits. There are a few hurdles with it, but the benefits outweigh the problems. Your top performing staff will think twice about going to your competitors if you offer them perks that benefit them, but without costing you.
• Strengthen your network.
  Now is the best time to start revitalizing your network. Do it before the situation gets worse, because when times are rough, you’re going to want to lean on your network. I’d be willing to bet that most of the people in your network are not yet prepared for what is coming. This means, when that time comes, they’ll be asking you for favor, and returning them in exchange. Take the current moment to reach out to the people in your current network, and offer them a hand. Additionally, spend some time meeting new people at local business groups, on Twitter, and LinkedIn. Offer your new friends something to show your level of commitment.
• Increase your cash flow.
  Last but not least, find ways to increase your cash flow. You should be striving to grow your revenue every month. New streams of income are hiding all over the place. Put advertisements on that newsletter that you send out every month. Start a blog. Create simple side products that reuse some of what you’ve already built — a simplified version of it. Share a piece of what you’re good at in a PDF and sell it.

Many of these may seem incredibly obvious, but I’m willing to bet you don’t even try to do most of them. Give it a shot, focus on them, and see where you stand in 6 months. Come back and let us know how you did.

Sure, it starts with an idea (hopefully one that is based on solving a problem in the real world market and not just something that is ‘cool’). Very soon after, you need to start considering a million things:

Business plan, formation and legalization, tax plan, cash flow, capital investment, partnerships, financial projections, strategic partnerships, expansion of the idea, architecture, functional and technical briefs, functional and technical specs, wireframes, compositions, prototypes, implementations, marketing plan, system architecture, system and network implementation and administration, alpha and beta testing, marketing implementation, and eventually your launch!

Chances are that in the beginning it’s just you (and maybe another person) bootstrapping all of this. The reality is, most of these components are absolutely necessary, and it can seem incredibly overwhelming. The fact that many founders skip a lot of these steps is one of the main reasons startups go bust so early (take for example that many forgo the financial forecasting, and thus, have no true sense of their revenue and profitability potential). The contrary can be said as well, that because some entrepreneurs focus too much on these areas they never really get off the ground.

You need to have thought out your business well and you need to successfully launch and continue to deliver. But how can one or two people do all of this? The answer is that you need to stay balanced and not get too focused into any particular stage or topic, and you need to reach out and discover what other successful entrepreneurs have done.

• Is it really necessary that your pitch includes a 50-page business plan instead of a concise but meaningful 10-page one?
• Do you really need to understand every detail about how to erect a functional specification, or can a short set of mockup diagrams be sufficient?
• Do you really need to spend a lot of time meeting with marketing consultants, or should you just hire a firm to take it over?
• How can you fund your business, and once it’s funded, how do you manage your cash flow?
• What do I really need in my business plan? Isn’t that overkill?

These are questions that are difficult to answer, and there is no single answer that works for everyone. You could get caught up in years of researching each of these fields if you’re not careful (this is why eventually businesses hire people that specialize!). Thankfully, there are conferences and training programs that can be really helpful. There are conferences that help you network and hone in on your skills for a piece of technology that you may use (i.e. RailsConf, Oracle OpenWorld, WWDC) and then there are conferences that help you with starting a business or marketing it (i.e. START!, Seed, TechCrunch50, BlogWorld Expo).

For example, coming up on October 2nd, 2008, is a one-day conference called STARTonomics in San Francisco that could help you figure out what pieces are critical to your startup, and which ones really aren’t. The sessions are led by entrepreneurs for entrepreneurs. Here’s a little glimpse of some of the sessions that will be taking place during this intense day:

• Welcome to Startonomics & Startup Metrics for Pirates (AARRR!)
  Overview of conference agenda + Intro to Startonomics: how to create simple, actionable metrics to help startups make better decisions in product development & marketing.
• Product Development 101: Designing & Prototyping the DNA of a Killer App
  What does it take to plan, research, and develop a great web 2.0 application? Learn tips & best practices for setting the right process, goals, and metrics for your startup.
• Marrying Design & Development: a Match made in Heaven, not Hell
  Learn about the basic fundamentals of web design, and find out how developers and designers can work together to create great websites and applications.
• Creating & Implementing a Web 2.0 Marketing Plan
  How to design and implement an online marketing plan for acquiring users from multiple marketing channels, how to prioritize & mix channels based on stage of startup growth.
• Revenue: The Internet Wants to Be Free, but You Need to Get Paid
  Learn how to generate revenue using a variety of business models & strategies including advertising, digital goods, subscriptions, lead generation, & e-commerce.
• Funding Wisdom: What I Wish I Knew
  Forget the school of hard knocks – this is your chance to hear what 3 successful startup executives learned about the funding process, including timing considerations, types of funding, term sheets and working with investors.
• View the full list here.

This is a must-attend conference for startups working on Internet-based products! Beyond general session topics, you will be able to connect with other startups and successful entrepreneurs who can help you answer the really tough questions.

I’ll be there, soaking it all up. After the conference, I’ll write up a summary of some of the things I’ve learned from others that I think is most important for a successful startup!

A Story About A Colleague

A young entrepreneur colleague of mine has an incredible sense of drive and enthusiasm. He’s 22 years old. He’s even pretty smart, which lends to his success attributes. However, he absolutely fails at networking. He recently solicited my advice about his problem, and I wanted to share it with others in this article.

I pointed out to him that while he was good at meeting people, and great at letting people know (including me) what he was working on, he never sincerely asked his colleagues what they were working on, or how he could help. He shared with me the thought that he felt his work was more important and had a lot of excitement around it. I’m certain that many others share his position with their own projects. However, he clearly overlooked that others associate this behavior with being self-centered or uncaring. No one wants to help someone who doesn’t exhibit the ability to help in return (that’s questionably self-centered as well, but that’s beyond the purpose of this article).

While I know without a doubt that he’s not intending to be this way, a little bit of effort from now on, and he’ll experience a valuable return from his network one day.

Ways To Nurture Your Network

Many people find themselves with a large network, but no way to harness it. Here are a few ways you can nurture your network so that, eventually, it can become useful, meaningful, and profitable to you in the future.

1. Request status updates by touching base. Showing interest strengthens your relationship.

2. Share status updates with others upon their request and even when they don’t ask for it. Share it in a personal and meaningful way, and definitely not as an advertisement.

3. Be open to collaboration! You can use the help. And if you are helping a colleague, they are more likely to help you when you need it most. Working together only strengthens your initiatives and doesn’t mean you’re giving up control or ownership.

4. Find out how you can help, then do it. You’re busy and have very little time for yourself anyway, so giving a small piece can seem wasteful. Think of it like you would an investment. Chances are that you can discover small things that will help your colleague. This shows support and validation to your contact, both of which you’ll need later on.

5. As much as you think you do, you don’t know everything about everything, or even about your field, so don’t act like it. Solicit and value feedback and advice from your network. Be open to the opinions of others, even if it conflicts with your convictions.

6. Connect people in your network with each other. Once you have a strong network of people who trust and value you, one of the easiest but most important networking responsibilities is introductions and connecting other people together. For this to flourish, you will absolutely need up-to-date statuses on their needs and activities.

These steps take commitment and effort, but if you apply them, you will see fruitful returns from your networking investments.

While there are a lot of other reasons that a majority of the businesses started fail within 3 years of operation, the leading cause is a defect in the team running the business. It seems that meeting the right people, for the right job, at the right time is painfully difficult. The proof is the fact that these failing teams are the venture killers!

But meeting the right people are difficult. Typically, to find them an entrepreneur must attend user groups, post advertisements for potential position openings, and query an existing social network. Without existing and trusted relationships already established, it is hard to acquire new connections. People want to get paid. And people really deserve to be paid. That hot idea and ripe market just can’t wait for that though; the opportunity slips by. Eventually, if the idea was worthwhile, another company beat you to it.

Why is it hard to meet and build relationships with quality people?

Unlike the days in most everyone’s youth, people are weary of building new relationships. They have wives and husbands, children, pets, existing jobs (“slave” labor), and hobbies; they are comfortable. People who are on the lookout for new connections are critical, and look down on lack of business experience. It is reasonable after all… they’ve been burned by inexperience, negligence, and victims of one-way relationships. Or they’re comparing you to the business owners they already know without getting a chance to see what you have to offer.

Why do so many people feel the need to be a part of every facet of the business?

This is something that has bothered me for a long time. A lot of people feel the need to dip themselves in every aspect of a new business’ responsibilities. Some feel that it is exciting to get a taste of every slice. Others have an ego complex. And still others have no sense of focus.

This is not to be confused with a general understanding and assistance of running a new business (“wearing multiple hats”). Core members of a new small business should definitely work together, lend a hand, and get an understanding of what the other members are involved in, but someone should ultimately own a responsibility. There’s simply no room for everyone to. Different views, opinions, and ideals eventually become a major disruption to what is suppose to be a bonding force between focused and striving founders.

Why is it so difficult to get teams to come together and build a shared agenda or ideology?

Why is it really? Is it because by nature our survival clocks keep us on our toes and lead us to trust (all too firmly) our instincts? Perhaps it is because we are weary of trusting others.

But in order for a business to be successful, a synergy between members is crucial. When a team can come together on a single (but shared) vision, positive growth starts happening. People jive, productivity increases, teams flow. Finding this balance is difficult, and as ever changing as stock market trends and pop culture.

There are answers. Nurture your connections.

Hired hands are a dime a dozen, but often they don’t provide a service-level needed to scale or start a successful business. Nurturing your network is the most beneficial form of building a future team. You’ll build trust and support, and eventually the people around you will want to be part of it all. By lending a hand to people you’ve met, mentoring another entrepreneur, or introducing them to your own network, you are seeding a future business partner (in whatever form that may be).

It takes work, but with persistence (and keeping in touch) you will find that the more quality people that you know will very quickly outweigh the quantity.

The question I propose to everyone is, what are some of your excellent methods of building solid relationships before a venture is even born, so that when the day comes to build a team, everyone is on board?