If you started a business recently, you know already that these are tough times, and you need the right tools to get your company off the ground and thrive. To give a new business more of an edge when the going gets tough, the tough get XML. The power and flexibility XML offers can help entrepreneurs better use their systems to build their businesses, but only if business owners know about XML and what it can do.

For those new to XML, the eXtensible Markup Language is a technology that enables computers -- from your smartphone to supercomputing number-crunchers to networked devices -- to talk to each other over the Web. While XML is often called a language, XML isn`t really a language; it`s more of a meta-language. XML standards set the basic rules for its use, and industries then adapt those rules to create common vocabularies for exchanging data.

Since its development over a decade ago, XML has become a common technology in Web and desktop computing. If you bookmark RSS feeds or download events directly to your Outlook calendar, you`re probably using XML. In many cases, XML is built into the basic architecture of everyday desktop software, such as Microsoft Office or OpenOffice.

Today`s business conditions, however, have reduced an entrepreneur`s margin of error, which wasn`t that large to begin with. Entrepreneurs in 2011 need to make their cash go further, which means making more use of open flexible systems, like those built with XML.

Fewer sales, less investment capital
In the December 2010 survey of U.S. small business owners, the National Federation of Independent Business found one-third (33%) of respondents cited poor sales as their biggest single problem. And all through 2010, respondents by double-digit margins in the monthly surveys said it was harder rather than easier to get a loan.

Investors as well are putting less money in start up businesses, for two reasons.
First, the flow of investment capital is slowing. Dow Jones LP source reported that venture capital (VC) funds raised 14 percent less capital in 2010 than in 2009, with fewer VC funds raising money as well. Only those funds focusing on later-stage financing showed an increase in 2010 over 2009; multi-stage and early-stage funds recorded double-digit percentage decreases.

Second, angel investors who are stepping in with seed and early-stage capital expect entrepreneurs to run lean operations, taking advantage of open source and cloud computing solutions. For entrepreneurs that means having business systems built for open, Web-based environments, which in many cases means built with XML.

Get ready to partner
A requirement of new businesses, in good times or bad, is to develop partnerships. In today`s world, partners can be your next door neighbor or an enterprise on the other side of the planet. For entrepreneurs that means having systems that can exchange data as seamlessly as possible with potential partners. XML provides that capability. It offers one way of future-proofing your enterprise and being prepared when a partnering opportunity arises.

The Brookings Institution in Washington, D.C. issued a report in January 2011 on industry clusters -- regional groups of companies and organizations in related lines of business, usually advanced technologies. The report showed how companies in these clusters prosper by partnering to build synergies and create efficiencies.

To take part in this new world of business, you need systems ready for the more demanding environment, yet still can jump at new opportunities. And more often than not, that means having XML at their core.

Alan Kotok is a Washington, DC-based reporter and writer on science, technology, business, and public policy.

He is editor and publisher of Science Business, a daily news blog covering the value chain connecting scientific discovery with the marketplace. He is also author, with David Webber, of ebXML: The New Global Standard for Doing Business on The Internet (New Riders Publishing, 2001).