Small businesses feel impact of credit crunch

October 2, 2008 3:09:48 PM PDT
Many Chicago-area business owners are feeling the financial fallout of the credit crisis. Getting a bank loan is very difficult these days, forcing owners to freeze hiring and layoff employees.Many small businesses are feeling the impact. ABC7 visited a suburban business that's won awards for its workplace environment and its growth. But in the last few months their success is tempered by economic forces.

Where do textbooks come from? Tucked into an office park in Glenview is Shakespeare Squared. In the last four years the company has been responsible for creating the content for new textbooks and curriculum guides. At one time, there were over 30 full-time employees -- many former teachers -- with a pool of 500 freelancers to do extra work. Now, there are 26 full-time, and they're using only 20 freelancers.

"I'm still at heart a teacher. So that's difficult," said Kim Kleeman, Shakespeare Squared.

Kleeman is president of Shakespeare Squared. Large publishers hire them to develop content, but things have changed.

"I find that most of our clients really want to be able to give those projects out to us. They just aren't able to financially do that. And they're having their own cash flow issues," said Kleeman.

Kleeman says she's honest with employees about the economic realities. Part of what makes this a great workplace, she says, is that the staff is close. And that's what makes it hard when Kleeman has to ask someone to leave or when someone leaves because they need more income.

"You cut those benefits or do you cut people? Do you cut profits? Profitability? Where you do have to start squeezing? And that's a really hard decision to make," said Kleeman.

Jill Stein was hired to translate a Spanish textbook. That book will be done in a couple of weeks.

"Times are tough. And if the work isn't there, I'm not sure what's going to happen," said Jill Stein, independent contractor.

Stein says her husband works full-time, but they've looked at changes they may have to make once her contract is up.

"It's very frightening. I have young kids. And I don't -- it's uncertain how this bailout is going to affect my husband and I and our savings. And my kids' savings," said Stein said.

Kleeman says, being transparent with her staff, the employees have helped come up with solutions. For instance, they now work a four-day week, and they're looking for other projects online and in trade publications.

Kleeman's company has really been hit with a double whammy: the foreclosure crisis meant less revenue to some school districts, so there are fewer orders for new textbooks. And, with the credit crisis, banks aren't as willing to extend credit to a small business where its biggest asset is its employees.


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