From the December 1997 issue of Entrepreneur

As we move into a new year--and, lest we possibly forget, closer to a new millennium--let us pause to consider Ronald Reagan, The Bonfire of the Vanities, "The Big Chill" and MTV. The 1980s were no joke. And though Oliver North, the Cold War and A Flock of Seagulls may be long gone, the '80s have, in many ways, set the stage on which we play out our contemporary lives. "We could argue the '80s never ended," says Gilbert T. Sewall, senior research associate at Boston University and editor of The Eighties: A Reader (Addison-Wesley). "Their so-called spirit has ended, but their legacy remains."

What exactly is this legacy? The knee-jerk reaction would be to dub the '80s the decade of greed. "The media constantly brings up this cliché," says Sewall. "It was more than that. It was a period of great invention and great energy." Cable television, microwave ovens, compact discs, fiber optics, satellites and ATMs were born, as were the first IBM PC and the Apple Macintosh. Sewall cites three monoliths that began their iron rule of America in the '80s:

1. Wall Street. The official term was economic stratification; the official attitude was that only suckers work for less than $200,000 a year. "There's every possibility the '80s will be remembered as a decade when the nation divided," says Sewall, who says the widening income gap is transforming us into a nation of "castles and trailer parks."

2. Silicon Valley. While Sewall finds it interesting that the entire Stanford University Class of 1972 seems to have e-mail, what intrigues him more is how technology "will affect the psychology of the young, how electronic learning will change children's ways of perceiving."

3. Hollywood. The celebrity culture, an obsession of the masses, continues full- force in the '90s. Likewise, Sewall notes, "If there's any [societal] macrotrend of the last 30 years, it would be the movement away from highly ruled conformity."

Sewall believes these are the factors that will be on the minds of entrepreneurs well into the new millennium, now less than 1,000 days away. "The issues of the 21st century are very much upon us," Sewall says. "And those social and cultural trends that either hatched or crystallized during the '80s are at the core of the new millennium's culture."

Charge It

Credit Card Financing Is All The Rage.

By Janean Chun

Small businesses are charging into the future. According to a recent survey by Arthur Andersen's Enterprise Group and National Small Business United (NSBU), credit card financing among businesses with fewer than 20 employees has nearly doubled during the past five years, from 17.3 percent in 1993 to 33.5 percent in 1997. Meanwhile, use of traditional financing sources declined, as reliance on commercial bank loans and private loans decreased 24 percent and 32 percent, respectively.

The popularity of credit cards as a form of alternative financing has escalated as more credit card companies target small-business owners. "What's changed is the availability of credit card financing, and the marketing campaigns the credit card companies are using," says Nancy Pechloff, director of Arthur Andersen's Enterprise Group.

More important, entrepreneurs are biting. "It's instant credit--and you don't have to ask anyone's permission," says Pechloff.

But with that lack of accountability comes a danger--credit card debt. "If they're using credit cards in lieu of having a relationship with a banker," says Pechloff, "there's no one providing any oversight, so this company could be overextended."

Fortunately, most entrepreneurs appear to be acting not out of recklessness or desperation but out of sheer strategy. Seventy-six percent of the survey respondents were able to obtain adequate financing for their businesses during the past year. And 60 percent of companies using credit cards pay off their bills every month; only 24 percent carry balances. "Small-business owners are getting 30 days of free financing from the credit card companies, then paying off their bills," says Pechloff. "It's a creative way to create cash flow in financing for short-term borrowing needs without paying the interest costs of bank loans."

Reality Check

Prime-time Takes On Entrepreneurship.

By Debra Phillips

They're not entrepreneurs, but they play them on television. Although doctors and lawyers continue to proliferate in prime time, small-business owners aren't completely left out of the limelight. In fact, NBC's "Veronica's Closet"--the new Thursday-night sitcom that's arguably the most highly touted of the 1997-98 season--revolves around a character who operates her own mail order lingerie company. Laughs aside, just how true-to-life is this entrepreneurial portrayal?

As played by the comedically gifted actress Kirstie Alley, Veronica appears to be more preoccupied with herself than with her business. Funny? Yes. Realistic? Not very. How many business owners, after all, halt staff meetings in order to deal with marital crises? And how many business owners are under media scrutiny so intense as to warrant a staged reconciliation with their estranged spouse?

For a more realistic TV take on owning a business, check out Fox's "Party of Five" on Wednesday nights. In this veteran drama series, motorcycle shop entrepreneur Griffin is seen wrestling with such issues as cash flow problems and customers who don't pay their bills. Does it not sound entertaining? Trust us, it is. Just don't blame us if Griffin's travails get your stomach churning in empathy.

And the believability meter reads . . . "Veronica's Closet": There's no business like this show's business. "Party Of Five": Watch--but keep the antacid bottle close by.

&flashquotMost Businessmen Don't Realize It Yet...&flashquot

But the middle class--the principal market for much of what they make--is gradually being pulled apart. Economic forces are propelling one family after another toward the high or low end of the income spectrum. For many marketers, particularly those positioned to sell to the well-to-do, this presages good times. For others used to selling millions of units of their products to middle-income folks, the prospects are altogether darker.

"By almost all measures, the degree of income inequality between rich and poor American families has been increasing. The richest one-fifth of families received nearly 43 percent of the country's total money income last year, their largest share in over three decades. That's more than nine times as much as the poorest fifth took in--vs. 7 1/2 times as much a decade ago. More critically, the broad middle class, defined as families with incomes between $15,000 and $35,000 per year (in constant 1982 dollars), fell from 51 percent of total families in 1973 to 44 percent last year. The extremes on either end, those making less than $15,000 or more than $35,000, grew as a percentage of all families. This trend seems to have escaped the attention of many American companies, even though it has far-reaching consequences for them as employers and as purveyors of goods."

--from a 1983 article by Bruce Steinberg, "The Mass Market is Splitting Apart," included in The Eighties: A Reader

Party Fouls

When Holiday Cheer Turns To Catastrophe.

By Charlotte Mulhern

We've all heard about Christmas party nightmares--somebody drinks too much and gets into a tiff with a co-worker, or maybe inhibitions get skewed after a few beers and inappropriate comments or gestures are made. Some scenarios we've read about paint even darker pictures: A drunk employee driving home can cause accidents resulting in injuries--and sometimes even death. So much for holiday cheer.

Think it can't happen to you? Think again. Christmas parties, with all their laughter and fun, also set the stage for disaster. Who's drinking, and how much? Will they be driving? The worst part is that your company can be held liable for any unfortunate incidents that might occur.

An entrepreneurial property management firm in Seattle learned that lesson the hard way. In 1990, following a simple holiday affair of hors d'oeuvres, champagne and awards, one of their employees--later found to be driving while over the legal alcohol limit--rear-ended another motorist. Though damages and injuries were minimal, the business was still tied up in legal battles six years later.

Instead of discontinuing holiday parties in the ensuing years, the company made some procedural changes, including no-host bars, voluntary attendance, and bartenders who refuse to serve intoxicated party-goers. Perhaps most important, the company urges employees to be responsible, watch out for others and take a taxi home if they drink too much. They've even considered banning alcohol altogether, a policy more businesses are instituting in an effort to protect themselves.

The policy seems to be working for this company, and there have been no repeat performances. But the company's spokesperson reminds business owners: "There are always going to be individuals who don't take responsibility for their actions."

On Guard

By Charlotte Mulhern

Even small businesses need to take precautions when throwing a holiday party. Walter Liszka, a Chicago attorney with 25 years of labor and employment law experience, offers these tips for limiting your liability:

1. Hold the party at a commercial location. "[That way, there's] not a dual message with regard to consumption of alcohol while on company premises," he says.

2. Make attendance voluntary.

3. Express your expectations. "The employer has to communicate to the employees that they must comport themselves responsibly while at the party and should not overconsume," Liszka says.

4. Encourage employees to bring a date. That way they have a ride home in case they overimbibe.

5. Don't serve hard liquor. Limit selections to beer, wine and plenty of nonalcoholic alternatives. Even more important: Don't serve underage employees.

6. Hold the party during the week. "When people know they have to be at work the next day, there is a greater probability they will drink responsibly," says Liszka.

7. Designate a monitor. This person can observe what's going on and defuse risky situations before they get out of hand.

8. Arrange for public transportation. Should your employees get a little tipsy anyway, you can ensure they make it home safely.

Read All About It

What Are Business Owners Reading These Days? The Top 10 Business Books At Press Time ( Based on net sales) Were:

1. The Excel Phenomenon, by James W. Robinson, $20 (Prima Publishing)

2. Millionaire Next Door, by Thomas J. Stanley and William Danko, $22 (Longstreet Press)

3. The Dilbert Future, by Scott Adams, $25 (HarperBusiness)

4. Wall Street Money Machine, by Wade B. Cook, $24.95 (Lighthouse Publishing Group)

5. Stock Market Miracles, by Wade B. Cook, $24.95 (Lighthouse Publishing Group)

6. Success Is a Choice, by Rick Pitino, $25 (Bantam Publishing)

7. The Dilbert Principle, by Scott Adams, $20 (Harper Collins)

8. Investing for Dummies, by Eric Tyson, $19.99 (IDG Books Worldwide)

9. Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, by Howard Schultz and Dori Jones Yang, $24.95 (Hyperion)

10. What Color Is Your Parachute 1997, by Richard Nelson Bolles, $16.95 (Ten Speed Press)

Snooze Button

Paying Employees To Sleep On The Job.

By Janean Chun

Employees may look as if they're deep in thought, poring over intense data or talking on the phone, but the fact is, they're getting sleepy, very sleepy. And while businesses aren't quite rolling out those beloved kindergarten mats, they are starting to acknowledge, rather than frown on, the nap.

In some cases, dream employers are actually offering employees nap-taking resources as a perk. A forerunner in the napping-at-work revolution is Macworld magazine in San Francisco, which has been offering a two-person nap room since 1986. Other companies are starting to sleepwalk in Macworld's footsteps, constructing everything from a one-person sleep area on a private indoor balcony to a 25-person nap room.

William Anthony, a psychologist and author of The Art of Napping (Larson), suggests employers seeking a kinder, gentler--and inexpensive--napping policy "could just tell employees that if they wish to nap on their break, they can, and they will be seen not as lethargic but as merely doing something that will improve their productivity for the rest of the day."

If you choose to live in denial and insist your employees aren't napping, you're in for a rude awakening. "I've talked to a lot of people who are napping in their cars, laying down on the floor or napping on their desks. Many employees are taking naps creatively," Anthony says. "And I think the bosses are napping, too."

Good Will

Going The Extra, Altruistic Mile.

By Debra Phillips

When entrepreneurs Mike Hannigan and Sean Marx say they're giving it their all, they're not speaking metaphorically. These founders of Give Something Back LLC in Oakland, California, donate nearly all their net profits to local community groups.

"We donate as much as we can," says Hannigan, 48, who teamed with Marx, 32, to launch their office supply company six years ago. That means that, with the exception of money set aside for salaries and company growth, the company's earnings--totaling $7.5 million in 1997--are given to groups that provide everything from trained dogs for the disabled to assistance programs for the homeless. Says Hannigan, "The money goes to the communities in which we market."

Inspired by actor Paul Newman's philanthropic food company, Hannigan and Marx set out to replicate his success in a field they were familiar with. Yet Hannigan stresses that Give Something Back is still a regular business. "The idea that the profits are given away is unusual," he says, "but our feeling is that any product that is bought and sold can be bought and sold under these conditions."

And Give Something Back's founders are getting something back for the approximately half a million dollars they've invested in good works. Observes Hannigan, "The feeling that you're involved in your community is something you can't put a price tag on."

Call It Up

Homebased Business Owners Say Hello To A New Line Of Phone Services.

By Heather Page

On the heels of Sprint's wildly successful Friday's Free campaign for small businesses, the telecommunications giant is gearing up to unveil a new deal designed for homebased businesses: Sprint Sense Home Office. The service, which entered a test phase last month, bundles several phone services for homebased businesses under one pricing plan.

For one flat fee, Sprint Sense Home Office packages together a toll-free number, a calling card and long-distance services. For example, users will be able to purchase 1,000 minutes for $100; the minutes can then be put toward any or all three services without any different pricing structures or extra surcharges, much like how cellular service works.

According to Sprint, the program is designed to deliver the most common phone services homebased businesses need in a convenient fashion. Sprint Sense Home Office is slated to go nationwide early next year. For more information, call the special number set up for Entrepreneur readers (888-280-0274).

Contact Sources

William Anthony, c/o Center for Psychiatric Rehabilitation, 930 Commonwealth Ave., Boston University, Boston, MA 02215, wanthony@bu.edu

Arthur Andersen Enterprise Group, (314) 425-9258, http://www.arthurandersen.com

Combe Inc., (800) 431-2610, http://www.justformen.com

Gilbert T. Sewell, (212) 870-2760, sewall@columbia.edu

Give Something Back LLC, (800) 261-2619, http://www.givesomethingback.com

Walter Liszka, c/o Wessels & Pautsch P.C., 321 S. Plymouth Ct., #900, Chicago, IL 60604, (312) 461-0500

John T. Molloy, c/o Marina Maher Communications, 400 Park Ave., New York, NY 10022, (800) 431-2610