Ji Hye Kim took a huge pay cut and now her restaurant is making millions

This is CNBC Make It’s Gen X special Millennial money series, which profiles people around the world and details how they make, spend and save money.

Kim Ji-hye never considered a career in the food industry. The 46-year-old immigrated to New Jersey with her family from South Korea when she was 13, and spent her early adulthood looking for ways to stay in the United States.

Every decision she makes revolves around one question: “What do I have to do to stay legal?” she said. For example, entering university meant extending her student visa. Any job she finds will require a sponsored green card.

Kim attended the University of Michigan in Ann Arbor and after graduating in 2002, she found a job in hospital administration in New Jersey. Although the job provided her with a green card, she eventually obtained citizenship through marriage. Her husband worked at her alma mater, and in 2007 King returned to Ann Arbor.

“This is the first time in my life that I can ask myself, ‘What do I want to do with my life?’” she said.

As she was considering her next move, she saw a job posting for a cheese shop. Singerman’s Deli. The job would mean a significant pay cut, from her previous salary of about $105,000 a year to about $16,800 a year. Still, she had a good feeling.

In fact, it was at Zingerman’s that she discovered her passion for the food business, and in 2016 she opened her own Korean restaurant in partnership with the deli, Miss Kimin Ann Arbor.

It took the restaurant several years to find its footing, including figuring out how to pivot its indoor dining during the height of the Covid-19 pandemic, but Kim persevered. Ms. Kim’s sales in 2023 were $1.89 million and net profit for the fiscal year from August 2022 to July 2023 was $101,553. Kim also paid herself $70,000 in 2023.

Here’s what you need to build this business.

Growing up eating my mother’s “korean kimchi”

Kim was initially hired to work in the specialty department of Zingerman’s, which sold artisanal foods such as sourdough bread and fresh-pressed olive oil. There, she learned the origin stories of the food she sold: families who had been making balsamic vinegar for generations, and cheesemongers who had monks aging their cheese in caves.

“I started thinking, if I ate Korean food or Asian food, and I could tell this story… what would that be like?” she said.

Young gold.

Provided by Kim Ji Hye

Kim also began to miss her mother’s Korean home cooking. When Kim was growing up, her mom “still found time to make her own kimchi from scratch after a long day at the nail salon she owned,” she said. Korean food in Michigan didn’t quite satisfy her craving for home-cooked food.

But in 2010, Kim learned about Zingerman’s The road to cooperation It’s an “entrepreneurship program where any employee or non-employee can apply to become a partner of an existing business or create a brand new Zingerman business,” she said. She and a Zingerman employee decided to promote a pan-Asian restaurant.

Operating a “little hot dog cart”

Kim and her partners met with Zingerman founders Paul Saginaw and Ari Weinzweig in 2011 to pitch their idea.

Kim and her partner decided to start with a street food cart called San Street, selling dishes such as soft tofu, avocado and bibimbap gooksoo. Zingerman’s has provided all types of support, including human resources and the physical cart itself, which Kim describes as a “tiny hot dog cart” rather than a “super fancy food cart.”

Communion Cart.

Provided by Kim Ji Hye

It’s located outside a parking lot designated for food trucks downtown, just a block from their kitchen. Kim’s partner left the business after the first season, but Kim continued to run the cart for a total of four seasons, from April to October. She worked 80 hours a week and “at the end of the day she was breaking even, making very, very small profits,” she said.

Between seasons, King devised a food business “course” for herself, she said. She worked at different restaurants, starting out as a line and prep cook at Zingerman’s and later working her way up the stage at Korean restaurants such as Hanjan in New York.

Throughout the process, she decided to dedicate her business to selling Korean food. “That’s the place I feel most familiar and passionate about,” she said.

Follow Korean tradition and use Michigan ingredients

By 2015, Kim felt like she had learned everything she could from operating the carts and working backstage at various locations. It’s time to open her restaurant.

Funding came from multiple sources: She used Zingerman’s line of credit to secure a $480,000 small business loan from a local bank, dozens more from Dancing Sandwich Enterprises, a holding company in Saginaw and Weizweg, and ZingTrain, a management consulting firm. million dollar loan. Construction and early operating costs totaled just over $1 million.

Miss Kim opened in November 2016. The idea is to create Korean dishes using local Michigan ingredients like beets, asparagus and corn.

In Korea, food is highly dependent on the region of the country it comes from, and sometimes even on the season. “Staying true to my place in Ann Arbor, Michigan in southeastern Michigan, kind of following the philosophy of Korean food,” Kim said.

learn how to turn

Despite the success of food trucks, opening a restaurant comes with its own set of challenges.

For one, customers didn’t always resonate with Ms. Kim’s menu, which originally featured Korean dishes from Kim’s own childhood, such as fried rice cakes with gochujang and Chinese cabbage kimchi. But Kim realizes that’s “just a part of Korean food, and it’s very subjective and personal.”

Kim began an in-depth study of her hometown’s cuisine, which dates back 150 years. This has led to the introduction of new dishes such as spiced braised pork shank and cheese fried rice cakes, which she believes will help sales.

According to Kim, during the fiscal year from August 2016 to July 2017, Miss Kim’s sales were $699,877. By 2022, the restaurant became profitable, with revenue of $1,833,096 in the fiscal year from August 2022 to July 2023.

Ms. Jin’s sales volume over the years.

Done

Since Ann Arbor is a college town, adjusting to the influx of employees and customers at certain times of the year is another challenge. “Our turnover really depends on the semester schedule,” King said.

The pandemic also presented its own set of obstacles, with indoor dining shut down in March 2020.

“It took us less than a week to reopen, and we only reopened as a takeout restaurant,” she said. “We tried set menus, we tried to-go cocktails, we tried family-sized portions,” she said, adding A large meal, not individual dishes.

Until a vaccine becomes available, Miss Kim is staying at a mostly takeout restaurant to ensure it doesn’t have to close again. Indoor dining is now back on offer.

Cancel tipping

Today, Miss Kim is profitable and thriving, with total sales in 2023 reaching $1.89 million.

Here’s what restaurants will spend in 2023:

Breakdown of restaurant expenses for 2023.

Done

The largest expense is labor, totaling more than $570,000 in 2023.

Although the minimum wage in the United States is $7.25 per hourthe tipped minimum wage for a waiter who also earns tips is $2.13 per hour. If a worker’s minimum tip plus their tips equals their local regular minimum wage, then their employer only owes them a small minimum tip amount. The situation may vary in each state. The tipped minimum wage in Michigan is $3.93 per hourFor example, the regular minimum wage is $10.33 per hour.

But King doesn’t want her staff to rely on “the weather or the mood of the customers,” she said. When Ms. King first opened, “We decided to eliminate the tip credit and pay people a living wage.” It was $14 an hour per person, and there was no tipping in the restaurant.

However, customers complained. “They want to leave a tip because the tipping culture is very popular in the United States,” King said.

Miss Kim’s fried tofu.

Zach Greene | Marissa Forziati | CNBC Success

Eventually, the restaurant adopted a hybrid model: Everyone now starts at $12 an hour, with various opportunities for raises, and everyone contributes to tips.

“Stressed out employees are less likely to provide quality service to our customers,” King said of the philosophy. “Employee happiness and longevity have a direct, positive financial impact on our business.”

“Maybe we’re on the right track”

Kim looks forward to continuing to grow the business. “We’re very excited to break the $2 million (sales) mark this year,” she said.

Ms. Kim’s unique dishes also gained recognition. In 2024, Kim received her fourth James Beard nomination for Best Chef, and in 2021, she was named one of the Best Chefs Food & Wine Best New Chef.

“When I get these honors, I’m a little disoriented, but I’m grateful,” she said. “This proves that we may be on the right track.”

What is your budget breakdown? Share your story with us for a chance to be featured in a future article.

Want to become a successful, confident communicator? Take CNBC’s new online course Become an Effective Communicator: Mastering Public Speaking. We’ll teach you how to speak clearly and confidently, calm your nerves, what to say, what not to say, and body language techniques to make a great first impression. Sign up now and use code EARLYBIRD for a 30% introductory discount until July 10, 2024.