Chasing Sweet Revenge

Marlo Scott was able to leverage her corporate experience to start her own business. "Sweet Revenge is run like a mini GE," she says.

Image: Jez Coulson

For Marlo Scott, being laid off from her job as director of custom projects at Time Inc., was a blessing in disguise. “I knew that this way my opportunity to finally become my own boss. I was out of excuses,” she says.

Now, two years after opening her specialty-food business, Scott is appearing in JPMorgan Chase's new ad campaign for its Ink card, the company's small-business credit offering. The campaign, which launched July 5, features real small-business clients who say they have used the credit card to finance their companies.

After leaving the daily grind behind, Scott decided to open up a cupcake shop with a twist. Instead of just selling sweetly frosted treats, she set out to pair the cupcakes with booze—either beer or wine—for an extra indulgent experience. At Sweet Revenge, her cupcake, beer, and wine bar in Manhattan's West Village neighborhood, customers snack on the signature dessert—the eponymously named Sweet Revenge cupcake, featuring peanut-butter cake, ganache filling, and peanut-butter-fudge frosting—and drink either Weihenstephaner Hefe Weiss, a German beer (which paired with the cupcake evokes a banana-nut flavor), or Callia Malbec, an Argentinean wine. Scott has put a whole menu of pairings together for those who want to “drink and be merry.” Patrons who may not have a sweet tooth can order savories like the Seville, which is a chorizo sausage and manchego cheesecake with romesco tapenade, and also pairs back to the Callia Malbec.

Striking out on her own was never a question in Scott's mind. “I knew that when the time was right, I would start my own business.” But when it came to picking her industry, she put her corporate hat back on. “At CNBC, I was the director of brand licensing and business development, so I already knew quite a bit about branding—how important something as little as a font can be to a brand's identity—and I had experience with creating customer interactions around the CNBC brand.” Add an MBA from the University of Michigan, supplemented by further business classes in New York, and it all helped lead her down the sweet and savory path. For a class project, she looked at the restaurant industry and found that, at the time (2006), cupcake shops had an 8 percent failure rate. Compared to the 60 percent failure rate of the overall industry, she was willing to bet on those odds.

But even as she did her market research, specialty-cupcake purveyors were growing by leaps and bounds. Magnolia bakery, previously a much-beloved local business, exploded when it started appearing in films and on TV shows like Sex & the City. And when one idea succeeds, others rush to copy it. Seemingly overnight, competitors began to sprout. So Scott knew she had to do something different. Enter the alcohol. “When people know they're going out for a drink, they're mostly predisposed to having a good time. And happy customers become returning customers. That's vital to a small business,” she says.

Another key element to a small business' success: doing your homework and keeping it small until the business hits it big. “I did a tremendous amount of research before opening my bar. I did a restaurant-business boot camp where I was the only person who wasn't passionate about baking. I was passionate about finding the right business for me that would make me happy and make others happy,” she says. “I also run extremely lean.” When a few of her workers had to call out early on, she found herself having to be hostess, server, and barista. Problem was, she didn't know how to operate her espresso machine and wasn't sure how to use her point-of-sale machine. A quickie lesson from a barista down the street and she was able to run on her own. “All of a sudden I realized that if I could tend bar, bake the cakes, and serve, I could save a tremendous amount in overhead,” she says. Ever since then, she's been regularly pulling shifts, teaching her staff by example, and making nice tips. “We turned a modest profit last year as a business, but what pays my bills are my tips,” says Scott, who isn't paid a salary.

To run her business, Scott also relied on some outside financial help. A $400,000 SBA loan was all she needed to sign the lease on her place, but it was her personal credit card that supplied the initial working capital. She turned to Ink through a solicitation, and the move helped her improve her cash flow. “Small-business owners have different cash-flow needs than big companies. I needed an option that gave me flexibility to juggle (my) bills while still being able to pay (my) employees on time,” she says.

As the ads begin airing, Scott hopes that her new relationship with Ink will lead to more business. She was paid a nominal fee for her time, so using this opportunity to her advantage is still ultimately up to her. “I'm taking the business one day at a time. The first spots ran at the end of a long weekend, and business was slow—typical of any holiday. I'm optimistic that more people who hear about us will make their way down, but I'm not increasing my staffing as of yet,” she says.