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SMALL BUSINESSES JUMP INTO CYBERSPACE The number of small businesses now with an on-line presence leaped 17 percent to three million in just the last year. Even more important than the number is the growing importance cyberspace means to these entrepreneurs. Fully 33 percent are now selling on-line, and half of those say on-line sales have met or exceeded expectations by accounting for 23 percent of their total annual sales. Of course, information travels in all directions across hypertext links: As consumers find shopping over the Internet easier and more convenient, entrepreneurs also are using the Web to comparison shop for cheaper suppliers. CUSTOM IS KING Mass customization now is the thing in marketing. Perhaps best represented by Burger King's "Have It Your Way" advertising program, the trend now is to let the mass market customer create his own product. It seems to be fueled by consumers' desire for individual treatment in an increasingly impersonal world. The Internet is a popular medium for mass market custom orders from made-to-order music CDs to personalized vitamins and even new automobiles. Ford Motor Co. is letting buyers "build a vehicle" from a spectrum of options. Y2K UPDATE • Three Y2K-analysis computer programs are available now that users can install themselves-and each is priced under $100. The Know 2000, Norton 2000 and Year 2000 Now programs take about an hour to run and will generate a report flagging which programs and utilities are "Not Year 2000 Ready." But these program don't solve all the problems, users then have to make the necessary changes by contacting their program suppliers. • The Internal Revenue Service says you can deduct the cost of modifying or converting existing software to make it Y2K-compliant. However, the purchase of new software or hardware related to Y2K is not covered. • The Small Business Administration has completed details of its $500 million Y2K Action Loan program. Small companies can borrow up to $750,000 for related Y2K costs with flexible payment terms including a one-year moratorium on principle repayment. • Not all the news is good. Some businesses may find it harder to get loans. A quarter of the U.S. banks surveyed by the Federal Reserve have reported rejecting business loan applications because the prospective borrowers have not resolved their year 2000 computer problems.

HOUSING MARKET'S UPS AND DOWNS A mild winter prompted earlier starts on new housing construction this year, which took away some of the spring boom normally seen. Construction of new homes in April dipped 10.1 percent, the third straight monthly decline and the largest decline in more than five years. New construction starts have leveled in the Midwest after recent record highs, but continue strong in the northeast and California. Residential remodeling expenditures are expected to grow three to five percent annually for the next five years, according to the National Association of Home Builders (NAHB). A recent American Express Retail Index shows 41 percent of consumers plan interior decorating projects this year. (For more information, see "Market Trends," page 22.) Two-thirds of Americans now own their homes, and NAHB reports half of U.S. homes are more than 30 years old. ENTREPRENEURS HIT THE ROAD The cost of retail commercial real estate in strip malls and other shopping areas nationwide rose 27 percent in the last five years, so picking the right spot to open a new store is more important than ever before. Two Illinois brothers with a Tex-Mex restaurant have come up with a new way to test a potential retail location beyond using traffic counts and demographic surveys. Franchise owners Bob and Terry Newman invested $240,000 in a mobile unit, which is two converted trailers set up with full-scale signs, standard cooking equipment and even a drive-though window. Because it would cost them $675,000 to open a new restaurant, the brothers are trying the mobile eatery at various locations before deciding on where to settle down.