Payroll is most often the largest cost component. People are a commodity when it comes to this kind of business environment. When times are hot, the value placed on this commodity is high. The next six months will remain pretty tough. Right now, it is very hard to start a new company in technology as well as most other industries.
Capital is tough to come by.
The angel investors and most of the incubators that had high profiles and were making bold Internet investments a few months back are either gone or on the sideline. Quite a few angel investors have found that after a couple of hundred thousand dollars has been lost in early-stage technology investments, it is easier to say no to every deal rather than take any risks at all. The IPO is nonexistent for the same reason. Most venture capital funds are busy with their portfolios, trying to sort through their existing problems rather than looking for new investments. There is still a lot of money available to invest, investors are just cautious for the time being.