It’s the only question you have been asking if you happen to work in or around tech. Investors are shifting resources to internal projects, businesses are slashing workforces, employees are tightening belts and the age of startups banking on a decent idea and the blessings of speculators are — at least for the time — on a hold.

If you were thinking about hopping into the market while prices are at a all time low, take a second to watch this.

Barron is saying that while Tech Stocks are down, we haven’t seen the bottom just yet. Spending is being slashed across the board and analysts don’t believe that it will pick up in the early part of 2009.

Everyone I talk to agrees, ad providers are cutting back on publisher approval rates and are trying to streamline sales in expectation of a continued downturn, marketing budgets are being trimmed and the money that remains is being pulled out of experimental campaigns and being put back into channels with clear returns.

The only portions of the industry that have remained unruffled are data storage and virtualization, as Barron reports. The reason is obvious, both of these industries provide cheaper alternatives to more expensive infrastructure (servers and additional computers respectively). With companies trying to save every penny, anything that raises efficiency and reduces cost will see the majority of funds.

So what’s an entrepreneur to do? Same thing we always do when the environment changes — adapt.

Be realistic

Unless you are in an industry that is immune to economic downturn (see: the funeral business or maybe water desalinization) things are going to get bad over the next 6 months, make sure that your projections assume that business is going to be slow and revenue is going to be much lower than expected. Freeze any optional expenditures and avoid being surprised when things don’t turn out as rosy as you expected.

Be frugal

Firing people is hard and it is expensive. If possible, get the most out of your current employees and make certain they are treated well rather than hiring on new team members. The worst thing you can do is to be forced into a position where a large portion of your staff will need to be cut because of your overly confident projections. Almost as bad is having to cut back benefits that the team has grown accustomed to in order to manage your budget.

Be a turtle

Find the portions of your business model that are least apt to be effected by a sour economy and grow those. Freeze as many nonessential projects as you can and concentrate your full effort on building out the machine that will get you through hard economic times. While you might think that explosive growth is what you need to get over the hump, remember that a penny saved is a penny earned and all those cool side projects aren’t worth a hill of scrap if you can’t keep the lights on.

More to the point, keep these rules in mind –

Assume that the money in your bank account is all the money you’re going to get from investors.

No matter what the number from rule one is, cut it in half and build your revenue goals around that.

Fight hard to keep morale high, it’s the only nonessential you should put a premium on.

Stay focused, avoid distractions and keep to the essentials.

Live in a world of new business models, don’t assume AJAX, Adsense and Arrogance will win the day. What do you sell that people would spend their limited budgets on?

Learn to relax. Like all business cycles this one will pass. It’s your job to survive long enough to let it.

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