Tim Zheng, CEO of Vite Kitchens, dedicates himself and his business to promoting workers’ rights through respect and equal power. Read on to learn how he runs his small business and creates healthy and delicious meals with the help of credit cards.
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With Universal Human Rights Month (December) behind us, it’s important to use that awareness to make year-round decisions that promote rights and dignity for all.
Tim Zheng, CEO of Vite Kitchens, does his part to promote workers’ rights as a small-business owner. Vite Kitchens is a Vacaville, California-based company that produces nutrition-dense, high-protein ramen noodles. As a former chef, Zheng has witnessed a lot of worker mistreatment. So, when the doors to his company opened in 2016, he was prepared to do things differently.
“Even in the beginning, when we were just a small handful of people, we made the decision to have every high-level person spend time on production,” says Zheng, who studied economics at the University of California-Davis. “It’s about respect. When you’re a manager, you’re not the king. You’re part of the support structure. If they need something, you get it for them, whether it’s helping buy supplies or unclogging the toilet. We have to fight for human rights in the food industry.”
“I believe workers should have equal power and respect, no matter their job title. We execute this with equitable, living wages, ethical treatment and a process of reserving the worker’s time that they’re paid for, no matter if there’s work for them or not that day. We understand that work is just that – work, a job. Not the reason to live. Creating a culture of healthy work-life balance is incredibly important to us.”
Vite Kitchens has also revolutionized packaged ramen noodles, a staple for everyone from students on a budget to families trying to extend their grocery dollars. Zheng’s version, however, is a complete, healthy meal. Unlike many common varieties of ramen noodles, his noodles are a significant source of protein, vitamins and minerals.
Business is booming, and today the company has 15 full-time staff members.
“We make all the noodles ourselves in the U.S., pay employees a living wage and only use high-quality ingredients we’d eat ourselves because, well, I eat them almost every day!” says Zheng. “They say ‘do what you love, and you never work a day in your life,’ but sometimes, I just don’t want to get out of bed. It’s hard running a small business these days, but I still do because I understand the weight of being responsible for other people’s livelihoods. I want to make sure they have a good life. We’re committed to ensuring healthy work-life balances, including no-questions-asked paid time off for mental health.”
To manage and grow the business, Zhang has formed a close relationship with Bank of America, where he has three very active credit cards.
What was your launch like?
We had no formal training! Back then, we got everything wrong. No one told us how to start this business, and finding the information was very difficult. Just going through FDA regulations and building codes was tough.
There were a lot of problems, including a hot water heater mishap. It wasn’t installed correctly, and we had to completely redo it, costing us an additional $35,000 before we even started! We had many machine breakdowns and power breakages because we were using so much power.
And then there was the first batch of noodles. We had to throw away a month’s worth because the storage was wrong. It wasn’t dry and cool, so condensation slowly crept into the noodles, and they became moldy.
What about other surprise expenses?
As a first-time business owner, you don’t know what you don’t know. Originally, we calculated everything we knew we needed, like rent, trash, pest control and insurance, but I wasn’t prepared for shipping, packaging and fulfillment costs. And then there was worker’s compensation. No one tells you how expensive that is! All the various e-commerce tools that we needed, too. We currently spend about $4,000 per month on programs that streamline our e-commerce structure on top of everything else.
And you use a few credit cards to manage those costs?
Yes, I have three Bank of America cards: Bank of America® Business Advantage Travel Rewards World Mastercard® credit card, Bank of America® Business Advantage Unlimited Cash Rewards Mastercard® credit card and Bank of America® Business Advantage Customized Cash Rewards Mastercard® credit card. I chose them because our banker would be able to keep an eye on the types of transactions we were doing and offer good cards that fit our business the best.
Anything we can pay for with a rewards credit card, we do. Even if there is a fee to pay the invoice, I do it if I come out ahead with the rewards. I’ve found that my travel rewards card works best with shipping because it’s really nice getting 3% cash back for free. With the others, we charge the business consulting costs and link all our online programs.
There are a few things we have to pay with cash since they’re so massive that our credit cards can’t handle them. For those, we use ACH or wire transfer.
How involved are you with accounting and credit management?
I do everything myself. Being a small, cash-strapped company has been insane, especially these past two years with the pandemic shutdowns, supply chain problems and much more.
We are typically leveraged because we are growing. Some supplies we need to purchase long in advance, too, since supply issues are causing eight months of delays. The credit cards are constantly cycling. Some months they are maxed out, then we come to another cycle and pay them off.
Is good credit important to you as a business owner?
Absolutely. If people see you have good credit, you can get net 30 (invoices due in 30 days) or net 60 terms (invoices due in 60 days). Good credit enables those benefits, and it took me about two years to work up to it. Net 30 and net 60 helps with cash flow, and lack of cash flow is the No. 1 killer of small businesses.
Good credit is also important because you can avoid predatory loans. I’ve seen some loans with 40% interest rates!
What’s in store for Vite Kitchens?
We are seriously expanding the line, with new flavors, formats and even a new Nanoboost powder, which will make any meal nutritious. Because it’s a tasteless powder, we’ve had success putting it in burgers, brownies and even mac and cheese!
Can you offer advice about credit cards or loans?
When I first started, I did not want to be in debt, ever. I hated the idea of needing credit cards or taking out loans. But if you want to grow your company and get things done, you usually do need to take on debt. It’s how you leverage what you need that’s important. Capital is a resource. When you take on debt, you’re purchasing a resource that you can use for growing your business.
Any other suggestions to entrepreneurs just starting, including how they can help with workers’ rights?
Start with a higher price for your product. You can start high and then go lower, but not the opposite. Costs will come in that you don’t know about, so you may have to keep the price up. Higher prices mean better, more understanding customers, too. So don’t go after the bargain customers for the sake of your sanity, too! The best customers see your value and will be loyal to your brand.
Always pay people what they’re worth. It’s extremely important to give them the livelihood they deserve and to build your business with human rights in mind.
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