-- If there is a rock and a hard place in the U.S. economy, small businesses are there.
Right in that little crevice where money is tight — and getting tighter. Right where weekly payrolls can be financed only by personal credit cards or home equity loans. And right where "income" for the boss is taking five bucks from the till and paying for a sandwich that day for lunch.
"Small businesses are in a real tough spot now," says Todd McCracken, president of the National Small Business Association.
The term "credit markets" sounds so esoteric. But for many companies that are nowhere near the Fortune 500, the credit markets are a very practical place to be. It's where bankers and other lenders decide if their small business will get money to buy goods, expand or pay employees — or not.
"The economy is very scary right now," says Judy Robertson, who runs Judy's Pet Depot on Los Angeles' west side. "As for me, being a small-business owner, I've felt it."
Even before the credit markets really seized up in September, which led to talk of a $700 billion bailout of financial institutions, small-business owners were asked if their business had been affected by the credit crunch. In August, 67% said yes, up from 55% in February.
To get an idea of what's going on, USA TODAY sent seven reporters and four video photographers out across the country to talk to small-business people.
Here's some of what we found:
(All numbers are for August.)
Number of small businesses:3.7 million
•A barber cuts shorter.
These days, some men go into Carlos Vinces' barbershop on Westwood Boulevard in Los Angeles and ask to have their hair cut extra short.
"Maybe for saving money," says Vinces. Short cuts mean they don't have to get their hair cut as often.
Last year, Vinces says some days he could earn $400 or $500. These days, the best days are closer to $200 to $300. He charges $22 for a basic cut.
Vinces says he may be forced to stay open longer. He's already working six days a week, closing only on Sunday. But he says he doesn't open until 11 a.m. and closes at 6 p.m.
Customers talk about their own issues. "A lot of customers told me they have a problem with the mortgage," he says. His own brother works two jobs and still has trouble paying the rent. But Vinces has his own problems. He has to commute 100 miles a day round trip to the San Gabriel Valley and pay for higher gas.
•An auto shop can't hire.
In Silicon Valley, a short drive from Google and Stanford University, auto-repair shop co-owner Danny Tran stares at the light street traffic and nearly empty sidewalks in downtown Mountain View. Typically, the area is bustling with diners and shoppers in the early evening.
During flush economic times, his GTS Auto Center is filled with a steady flow of customers. But since spring, sales have been down 20% to 30%.
"Everyone says the economy is bad, there are no jobs, they don't want to spend money on their cars," says Tran, a Vietnamese American who immigrated to San Francisco 20 years ago.
"I try, but it's hard."
•A yoga lover stays calm.
Tracy Columbus, 47, runs her own "lifestyle, branding and marketing" strategy business.
She says her business is doing fine. Her home value has held up, and she has invested conservatively. She says she has always lived within her means. But she's still worried about the effects of the meltdown.
"As a citizen, I'm very concerned," says Columbus, who was visiting a yoga studio near her Westwood home in L.A.
•A boatman scrapes by.
Benjamin Swift is a commercial diver who cleans hulls on yachts.
His business is being hurt because many of the yachts he takes care of are owned by business owners who are being hurt by the credit crunch. "As it gets tighter for them, it gets harder for them to spend money on something like this," he says.
He used to employ a couple of divers for his business, but now it's just him. And he's taken on a second job. "I had to let go my employees and scale back until I became profitable," he says.
"I'm facing no sales, no business, no nothing."
Number of small businesses:849,500
•A tough bar in tough times.
The Texas Bar and Grill is in a tough part of Detroit.
In this part of town, the poorest big city in America, it's hard to tell which buildings are open for business and which are abandoned, because all have bars on the windows and doors.
Texas Bar and Grill bar has a sign on the door warning potential customers: "No bums, no hookers, no thieves, no selling of any kind. We DO call the police."
Sherry Orr has been a bartender there for 14 or 15 years and says she's never seen business this bad.
At lunchtime on Tuesday, there wasn't a single customer in the bar. Normally, at least a few workers from the Chrysler Jeep plant nearby would have lunch there, she said, but their hours have been cut back. When customers do come in for a drink, they tend to order cheap beer instead of the more expensive liquor and mixed drinks.
"People (are) broke," she says. "People just don't have the money to drink anymore."
•Across town, worry comes.
Just one-tenth of a mile away from the Texas Bar and Grill along Kercheval Avenue is Grosse Pointe Park, the first of five small towns all with Grosse Pointe in their names. The cities are among the wealthiest in Michigan.
Still, the Grosse Pointes aren't immune to the economic problems in the state. Along Lake Shore Drive, a wide road lined by Lake Saint Clair to the east and large, stately homes and mansions on the west, 15 homes were for sale along 3.5 miles of road.
For Brandon Kahlich, owner of Bambu restaurant, business is still healthy. But that's because he's tried to add on more work, such as catering outside events and selling coffee and pastries in the morning.
"I'm trying to be nimble and to move fast to adjust to my customers," he says. "People are concerned about what's going to happen with their money. But this is Grosse Pointe. A lot of people will get by."
IN NEW YORK
Number of small businesses:1,925,100
•A butcher trims back.
At J.T. Jobbagy, a meat purveyor to high-end and middle-level restaurants in Manhattan, business has been down by as much as 20% in recent months since the start of the year.
The business, opened since 1981, has expanded into wholesale cuts of meat to supermarkets to try to offset some of the decline in sales to restaurants, says partner John Jobbagy. What's making the slowdown more difficult, he says, is the rise in costs, including packaging, fuel and energy, which is up 40%.
But the only thing to do is ride it out.
"What can you do when everyone else is being squeezed?" he asks at the end of his workday, which begins at 4 a.m.
•A PR firm gets cautious.
Samantha DiGennaro, founder of public relations agency DiGennaro Communications, hasn't seen any major cutbacks from clients, but she is being cautious with her spending.
When the coveted space next door to DiGennaro Communications' existing office in New York City's trendy Tribeca area became vacant just a couple weeks ago, she jumped at the chance to possibly lease it and expand her existing office area. (The current space, which seats 10 people, is about 2,000 square feet. The new location would have added about 1,000 to 1,200 square feet.) She met with an architect/designer and construction expert, but with the financial crisis, she decided to table the expansion.
"This is not the right time," she says. "We can pile more people in my current space."
Adding on the new space "would have brought my rent up significantly," she says.
Another step she recently took was to scale back on her weekly staff breakfast meeting. Those meetings used to take place at nearby restaurants. "It was a nice perk while we could do it," she says.
Now, meetings will be in the office. And she'll bring in bagels.
•A caterer scales back.
At The Green Table, an organic foods restaurant and catering place, owner Mary Cleaver says people are cutting holiday parties, paring back party times from four to two hours and changing menus to shave dollars from their expenditures.
So she's cutting back, too.
"We're definitely feeling it," says Cleaver. "Catering is the indicator for the indicators."
To boost business, she is adding tables to her restaurant to try to get more people in the door to sample her food for catering events and to boost revenue at the same time.
Number of small businesses:859,500
•A car dealer gets hammered.
In Atlanta, Steve Rayman, who has ownership interests in nine automobile dealerships, including five in Atlanta, says he's being hammered by the credit crisis.
"It's devastating," he says. "We're 75% off. We're having to cut costs, trim budgets and trim spending. We're cutting it 75%."
Rayman, 54, says his dealerships have cut staffing by 5% to 10%. "We've tried to get the cuts through attrition," he says. "When someone leaves, I try not to replace them. We're doing things like, I have one office manager running two stores. That's something we've never done before."
Rayman says the bankruptcy filing this week by Georgia-based Bill Heard Enterprises, one of the largest Chevrolet dealers in the nation, sent a shock wave through dealers here. "That just goes to tell you, the No. 1 biggest dealer in the world, if it happens to him, it can happen to any of us."
Rayman, a pitchman for his dealerships whose face is familiar to television viewers here, in the Carolinas and in Miami, says he runs a lean operation and is not hurting as badly as some dealers are. "I'm not lavish," he says. "I don't live above my means. I prepared myself for something like this. But I'm not making money. I was so accustomed to doing so well, and I'm not right now."
He's trying to keep a sense of humor: "I tell people it's slow in the morning, and it tapers off by noon."
•A recruiting firm booms.
Mo O'Neill, owner of StaffNet, an Atlanta recruiting firm, says she is seeing a 30% to 35% increase in people seeking work. The residential construction industry and mortgage industries have been particularly hard hit.
"I am seeing a lot more résumés and a lot more referrals," says O'Neill.
The economy is uneven in Atlanta, she says. "It's a strange situation. The companies that are making money are really doing well, and the companies that are struggling are really struggling. There doesn't seem to be much in-between."
O'Neill says the Atlanta economy does not seem to be as bad as "gloom and doom" media reports indicate. "I think there has been a lot of fat trimmed off," she says. "There are a lot of mortgage-type people on the street, and there are some banking people nervous. But I haven't seen as many layoffs as you might expect."
O'Neill, a corporate recruiter for 25 years, says things could change immediately. But she says, "I thought the early 1990s were worse. After 9/11 was worse."
O'Neill says she stresses flexibility to people seeking jobs. "Flexibility is important," she says. "Sometimes people aren't going to make the same money they were making. They need to be flexible as far as being willing to commute to get to jobs that are available."
Number of small businesses:643,600
•A car-rental firm grows.
Gib Leonard is owner of Gib Leonard's Rental Car Clearance Center, an auto sales and repair shop, in Arlington, Va. The suburb of Washington, D.C., has a strong economy and a relatively low unemployment rate.
Despite many nationwide financial troubles, business is going well here, largely because Leonard expanded into scooter sales and service.
"Oddly, we could hire people now. There will be no layoffs here," he says.
Revenue is increasing and profits are increasing, he says.
"I'm not worried about losing my job," says manager Jamie Jones.
•An upscale men's groomer snips along.
Grooming Lounge co-founder Mike Gilman says his industry is like "spirits or alcohol." Business stays steady because businessmen have to look nice.
Grooming Lounge is an upscale barber/salon for men. It has three locations — Atlanta, Virginia and Washington, D.C.
"Our business is not down, but it's not up as it has been," he says.
Where he's seeing the drop-off: first-time customers. "Where we do see a difference is in a lot of first-time guys who are looking to trade up. A guy who says, 'I'm going to step it up a little' " may now not want to spend $50 or more on a hair cut. (Grooming Lounge's cuts start at $50.)
But Gilman says that regular customers are still coming in.
He also says that guys who are looking for new jobs — or just to retain their current jobs — have also realized that they need good grooming.
Those guys "have to look like they're on top of their game."
Contributing: Chris Woodyard in Los Angeles, Ed Iwata in San Jose, Sharon Silke Carty in Detroit, Larry Copeland in Atlanta, Theresa Howard and Laura Petrecca in New York, Jayne O'Donnell in McLean, Va.