JOHN LEE STRUGGLED TO FEED HIS FAMILY AFTER ARRIVING FROM SOUTH KOREA BUT NOW MAKES MILLIONS THROUGH GOVERNMENT SMALL-BUSINESS CONTRACTS

In 1985, civil engineer John Lee left his native South Korea and arrived in Los Angeles with barely enough money to pay his first month’s rent.

His dream was to start his own engineering company, but his first concern was making enough money to put food on the table for his wife and 8-month-old son.

So Lee began buying women’s and children’s apparel every week in L.A.’s downtown garment district and selling it on weekends at a swap meet in El Monte. People used to comment that the young engineer had good taste in apparel and soon he was making nearly $1,000 a week.

Lee’s success in his first business venture eventually provided the resources he needed to get a start in engineering and construction. In 1987, he founded Ace Engineering Inc., and his first jobs were repairing and paving parking lots in Koreatown.

He would find work by sitting down with the telephone directory, leafing through the Yellow Pages, and finding all the general contractors in Koreatown. Then he would send out marketing packets that contained his resume and information on how he would work for the contractors.

As part of his strategy, he didn’t make contractors pay for his services until the job was done and they were satisfied. Amazingly, he said, everyone paid him in those early years.

Thirteen years later, the 44-year-old engineer’s company is posting $20 million in annual revenues, and Lee is being honored on Oct. 16 by the U.S. Small Business Administration in Los Angeles as its minority small business person of the year.

Coming to America

The strides that Lee has made in the United States are a far cry from his modest upbringing in South Korea. His father used to own a coal mining company there, but went bankrupt in the late 1950s when many industries switched from coal to natural gas and other fuels.

Despite being raised in a family of modest means, Lee was able to attend Sung Kyun Kwan University in Seoul, where he received his civil engineering degree in 1980. Immediately, he landed a job with Samsung Corp. The Korean conglomerate sent him to Iraq to set up a branch office and oversee construction of a highway from the Syrian border to Baghdad. But five years later, Lee decided to quit and come to this country, where one of his older brothers had been living.

“I left to come to the United States because I saw that I would have a future here,” said the soft-spoken Lee, inside his modest offices in Walnut. “I was raised in a very poor family, and Korea has a line of promotion that comes from the chaebol (the big families that control South Korea’s major conglomerates). I had a dream of being by myself and building my own company.”

Lee knew that to build a successful company of his own, he would have to work hard and smart. So when he started his company in 1987, with only $5,000 in savings, his office was inside the small apartment he shared with his wife and 3-year-old son. His wife answered the phone. Lee did much of the manual labor because he had only one full-time employee and hired day laborers to fill in.

At first, the hours were extremely long. Because Lee had no construction equipment, except for the used pick-up truck he had bought for $3,000, he would be down at the equipment rental store at 5 a.m. to get a paver that he often had to operate himself.

To increase business, Lee made sure every job was accomplished with precision and that his reputation was unblemished. It worked. By 1990, revenues were up to $1 million and Lee was snagging bigger contracts. His parking lot contracts had grown, and he was excavating and laying the foundations for apartment buildings and hotels in Koreatown.

But there was one slight problem. Lee’s revenues were mushrooming but so were his uncollected accounts receivable. In 1991 and 1992, some of his customers declared bankruptcy after their newly constructed hotels failed to produce profits.

“About 10 percent of my revenues were lost because of unreceivable accounts,” Lee said. “I learned many lessons.”

Getting government contracts

One of those lessons came from former U.S. Rep. Jay Kim, who had run a successful engineering company before being elected to Congress. After hearing Kim speak at a Korean Contract Association meeting about minority-owned businesses garnering federal government contracts, Lee decided to switch gears.

“I decided to do 100 percent federal government (work),” the engineer said. “It was a tough move because all my background was in Koreatown. But we have an expression in Korea, ‘If you chase two rabbits, you’ll lose both of them.'”

Lee picked up a copy of the Green Sheet, a local trade publication that lists all government projects up for bid. He began bidding, with his first successful contract coming as a $100,000 parking lot project for Culver City.

Then in 1992, he got a $1.4 million contract with Vandenberg Air Force Base in Lompoc to pave several sites there. Lee knew that this job would make or break him. So he devoted all his energy to the endeavor. He rented a house nearby and worked seven days a week.

He completed what at first had appeared to be an eight-month contract in just three months and has been landing contracts at Vandenberg ever since.

“He strives to do a good job in a safe manner and doesn’t have people out there who are not professional,” said Larry Romero, an Army Corps of Engineers construction representative currently involved in a project that Lee is working on.

By 1995, Lee was employing 20 people, but annual revenues had leveled off at about $10 million. To boost his business, he enrolled in the Small Business Association’s 8(a) program, which helps socially and economically disadvantaged businesses develop the capacity to compete for federal contracts. Once a company has completed the program, it can be the sole bidder on government contracts that don’t exceed $3 million.

In the five years since completing the SBA program, Lee has gotten 16 federal contracts totaling $45 million.