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Business Observer Thursday, Feb. 12, 2009 12 years ago

Great Scott

Twenty somethings have an extra burden other entrepreneurs don't face: youth. Here's how Samantha and Derek Scott overcame that barrier.
by: Jean Gruss Contributing Writer

Twenty somethings have an extra burden other entrepreneurs don't face: youth. Here's how Samantha and Derek Scott overcame that barrier.

Samantha Scott knows right away when age is an issue the minute she sets foot in the offices of prospective clients.

“You walk in and they say: Oh!” she chuckles.

One prospective client turned to Scott after she made a pitch and told her: “For being so young, you really know what you're doing.”

Young entrepreneurs have the added burden of proving that youth and incompetence aren't synonymous. Samantha, 24, and her husband Derek Scott, 28, have figured out creative ways to overcome the age barrier.

For starters, Samantha doesn't make cold calls and Derek rarely visits clients in person. They say they've figured out better ways to reach clients for their direct-mail company, DataMail, and public relations firm, Pushing the Envelope.

Samantha Scott says the best way to land clients is to show them how she can promote their charitable endeavors. For example, she joined the board of the Children's Advocacy Center and was marketing chair of the organization's capital campaign. “That's advertising you can't buy,” she says. “That's how we survived.”

Meanwhile, Derek Scott leaves the marketing to Samantha. His focus is purely on running the operation. That's proven to be another way to earn new-client business as satisfied customers spread the word. Together, the Scotts now have about 30 clients.

But it wasn't easy at first. Derek started DataMail three years ago with one customer and $150,000 in debt to finance the business. He and Samantha maxed out the credit cards, leased mail-sorting equipment and took out a second mortgage on their home. Fortunately, that was still during the real estate boom and home prices were still appreciating. And Samantha was still an employee of a public-relations firm at the time.

When Samantha joined Derek two years ago, the couple cut their spending back. They cut out HBO, shopping for non-essentials and eating out. Derek's brother moved into their house and rented a room to help pay the mortgage.

The Scotts have separate checking accounts; he makes the car payments and the mortgage and she pays for everything else.
When they were shopping for a commercial line of credit, age was a factor with the big banks. But the smaller, locally owned banks were much more receptive to their request. “They were more willing to hold the conversation,” Scott says.

Initially, Samantha's role was to help Derek line up new business. But because of her background in public relations, she started getting work in that arena. Today, the public-relations work dominates her time. It's a good thing, because it turns out that Derek's busiest months of the year coincide with her slowest time.

Like many businesses, the Scotts have been impacted by the economic downturn. The DataMail side of the business is down 30% to 40%, they estimate. But Samantha's public-relations business has taken up the slack.

Looking back, they acknowledge some rookie mistakes. For example, they wouldn't have spent $20,000 renovating space they leased even though they did most of it themselves. The lesson they learned: Save more profits for rainy days. Derek says the goal is to save at least one year of operating expenses.

Still, they've managed by diversifying their client roster, which has served them well in the downturn. They include architects, printers, restaurants, automotive stores and advertising agencies.

Although she concedes that she would have kept her job two years ago if the economy had been what it is today, Samantha has no regrets. “I couldn't have made a better decision,” she says.

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