I own a baklava bakery in San Francisco. Life as a small business owner in a city flush with AI money has been hard.

This as-told-to essay is based on a conversation with Tolgay Karabulut, the 43-year-old founder of BaklavaStory, a baklava bakery in San Francisco. It has been edited for length and clarity.

I’ve been running a baklava bakery, the thing I’m most passionate about, for the last five years. But the financial pressure I’m facing in San Francisco makes me question whether I can continue doing this forever.

I moved to the United States from Turkey in 2005, when I was 21, to work as a lifeguard at a water park in New Jersey. During that time, I visited California for a month. I knew immediately I wanted to move here.

I’d always been an entrepreneur at heart, trying different businesses like selling toys from China and setting up small kiosks in malls. When Silicon Valley was growing in the 2010s, my friend and I rented office spaces and subleased rooms to startups.

But I always wanted to work in food. I had eaten in many places around the world and wanted to start a food business.

In 2022, I finally started a baklava business, BaklavaStory. Baklava is a pastry dessert made with filo dough, chopped nuts, and syrup. I invested everything I had and borrowed money from friends, putting about $300,000 into launching the business.

Nobody believed baklava would work in San Francisco. People told me it would be too sweet for people’s palates.

I said, “Well, I am the chef. I’ll adjust how sweet we make it.”

12 hours in the bakery making only one dessert

Now, my days consist of me waking up around 5:40 a.m. every day, Monday through Saturday. I live about 10 minutes from the bakery. When I get in, it’s just one staff member and me preparing the filo dough.

The rest of the kitchen staff arrives around 8 a.m. By then, we have the fillings and ingredients ready, including ground pistachios and walnuts. They start assembling trays, and we try to get the first batch into the oven around 8.30 a.m. It comes out around 9.15 a.m., just before we open at 9.30 a.m.

I only sell one thing — baklava — because I want it to stay fresh all day. I make my baklavas with fresh, hand-picked pistachios that I bring in from Turkey, because I think they’re the best.

We prepare trays constantly and bake them about every 20 minutes to ensure every customer gets fresh pastries. Everything is made in my small bakery kitchen, about 100 square feet.

The kitchen staff usually makes 50 or 60 trays and finishes around 2 p.m. After the staff leaves, I keep baking the trays myself because I can’t afford to keep the whole team there all day.

If customers keep coming, I bake until the kitchen closes at 6 p.m. Usually, I’m exhausted by the time I get home and fall asleep right after.

Labor is my biggest expense

My biggest challenge and expense is labor. Manpower is expensive in California, and my business is very labor-intensive because we don’t have machines doing the work. Everything is made by hand.

I’ve found good people to make up my seven-person team, and I don’t want my employees to leave or struggle.

One way I like to make things easy for my staff is by cooking lunch for them every day.

Sometimes we eat eggs and tomatoes or mac and cheese. I buy a lot of food in bulk at Costco. Frozen Costco pizzas are a hit with everyone, costing as little as $20 to feed the entire team.

Wealth from the AI boom is making life in San Francisco harder to afford

Financially, things are very tight for me. I’m not really making profits for myself right now; last year, I took home around $40,000.

I have to share a rent-controlled apartment in Nob Hill. My half comes up to roughly $1,300 a month, including utilities and WiFi.

I don’t even have a closet. I have a four-drawer unit where I keep my 20 T-shirts and four pairs of pants, because my roommate uses the closet.

I check Facebook Marketplace almost every day to see if I can find a one-bedroom apartment and finally live on my own, but it’s all out of my reach since housing prices have skyrocketed in recent months.

My income isn’t growing quickly, while I’m hearing about so much money is flowing into AI. We keep hearing about people at AI companies getting contracts worth $200,000 or $300,000 a year.

For them, rent can feel like nothing. For the rest of us, it isn’t. They have more money than people like us who are running businesses at the street level.

But I’m hardly ever home; I go home only to sleep. Even if I had the best house in San Francisco, it wouldn’t make much difference.

Right now, my priority isn’t having a comfortable home, it’s figuring out how to grow my business. I hope one day I’ll make more money, get a bigger kitchen to bake bigger quantities, sell more, and rent an apartment for myself.

The customers make it worth it

What keeps me going is seeing people’s reactions when they try my baklavas.

Hearing customers say, “Oh my God, this is so good,” makes all the worries melt away and makes me want to go back into the kitchen and bake more.

I’ve also developed my own way of explaining how to eat baklava. The top layer is drier, so I tell customers to turn the piece upside down when they eat it. That way, the drier part hits your tongue instead of sticking to the roof of your mouth.

Sometimes, repeat customers bring their friends in and start giving them the same instructions. That makes my heart full.

This baklava business came from my passion and my roots, and seeing it succeed makes me happy. I’m dreaming of a better life, but I’m already living my dream.