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How a Great Business Idea Can Fail — Just Because You Live in the Wrong Place

Exactly 10 years ago I started a small book design company that went on to become quite successful. But in the beginning, business was a bit slow, so I started some side businesses to help pay the bills.

These side businesses were all successful or promising in different ways. Except for one, which was a total flop. And after ninety days or so, I shut it down, and turned it into something else.

The initial concept was great, and I launched the new business in the most careful way possible, with all the correct marketing steps. In short, I did everything right. But the business was destined to fail, simply because of where I lived — in the area around Grand Rapids, Michigan.

If I had lived in Seattle, Minneapolis, Chicago, or some other locale with a more vibrant and sophisticated market, I feel the outcome would have been very different. But that was not to be.

My Better Idea, First

My main business, Concord Editorial and Design, was created as a location-independent business. This was 10 years ago, before location-independent businesses were cool, and it has since done $750,000 in sales — even though I took one year off — which surprises even me.

I didn’t start the business to become a “digital nomad.” (That term didn’t even exist then.) It wasn’t my plan to live on the cheap in Thailand or to move to Bali. I also didn’t want to couch surf my way around the world with a laptop. I personally like having my own couch, and like waking up in my own bed — thank you.

The single, overriding reason I started this location-independent business was so I could get work from clients anywhere in the United States.

At the time, the economy was just terrible in West Michigan, and there were no jobs available there for people with my skills in book publishing.

Starting a location-independent business would allow me to work in a field I loved, and it would also allow me to live anywhere in the United States, once it got going. None of my clients would be local, so I could keep them if I ever decided to move.

That turned out to be a great plan, and it worked beautifully!

But what I did next turned out to be not so great.

A Good Business Idea — That Was Doomed to Fail

So here’s the great idea that would fail in short order:

I would create a local graphic design and marketing communications company based on a virtual model. This side-business would allow me to charge a higher rate than I did for book design and production, and also allow me to get out of the office and meet with real people. I would do the copywriting and project management myself, and I would locate and hire world-class graphic designers on an as-needed basis.

So, in starting this business, I put all of these foundations in place and located almost a dozen fantastic designers I could call on.

Most of the graphic designers I signed up were not in West Michigan. So I would act as their agent in the local market, and show their work to potential customers.

The kind of high-quality talent I represented. One person told me, “This is the most amazing work that I’ve seen during my entire career, which you are making available in West Michigan.” But I couldn’t get any traction.

The kind of high-quality talent I represented. One person told me, “This is the most amazing work that I’ve seen during my entire career, which you are now making available in West Michigan.” But I couldn’t get any traction.

When a project came along, I would use the graphic designer who had the best matching skills and style for the specific project.

This seemed like a great plan, with low overhead, and I had the knowledge and skills to pull it off.

In fact, before I launched this new venture, Cameron Foote, the author of the leading books on how to run a graphic design agency, looked over my marketing materials and said, “I haven’t seen an agency package this good in many months.”

Of course, hearing this kind of feedback from a renowned expert like Cameron Foote raised my hopes. But despite how good my materials were, the business itself couldn’t get traction fast enough.

The First Warning Signs

Whenever I undertake a large project like launching a business, I take a methodical approach. You especially need to be methodical in your marketing.

So the first thing I did was buy a mailing list of the top 1,000 businesses, in terms of sales, in the Grand Rapids, Michigan area, where I lived, from Dun & Bradstreet. This included businesses that did $3 million in sales per year all the way up to hundreds of millions of dollars in sales.

I then imported this mailing list with sales figures into my database program, started to clean the list and find websites for all the companies online, and then added this information to my marketing database.

And as I did this, my heart began to sink.

Many of the business websites were unprofessionally designed. They looked like they’d been created by the owners’ nephews, who were probably still in high school. Obviously, they had never used professional copywriters either.

Out of the 1,000 top businesses, only a small percentage had good-looking websites and marketing materials.

What this showed me is that most of the businesses in the local area didn’t take their marketing seriously, and they never decided to invest in professional-quality work.

And as I had learned from my mentors and my own personal experience, trying to work with companies like that is a losing proposition. Good clients already understand the value of the services you are offering. When you really need to educate potential clients, it usually becomes a waste of time because everything becomes terribly inefficient.

I had put some wonderful mailing pieces together and also had some good offers — my first mailer offered a white paper on “12 Essential Marketing Rules” — and I was eager to send them out. So I hired someone to telephone every single company in the database to find out who the marketing director was at those companies, and to bring our database up to date.

Let’s just say that, for many companies, the kind of answers we got over the phone were not very encouraging. Some of the smaller companies were even unsure of who handled their marketing.

From this we learned that we should focus only on companies above a certain size in annual sales.

My Portfolio Showings

I had top-quality work and talent to represent, so we systematically set up portfolio showings and meetings with the most-likely candidates — the local businesses that actually had a budget for marketing materials.

Over two or three months, I met with people at 30 different companies, and it just wasn’t going well.

One person at a national company told me, “This is the most amazing work that I’ve seen during my entire career, which you are now making available in West Michigan. But unfortunately, things are changing here, and we don’t do much marketing now.”

Getting ready to build my graphic design empire in West Michigan — an empire that never materialized.

Getting ready to launch my graphic design empire in West Michigan — an empire that never materialized.

Someone else said, “We do a marketing project once every year or two, and we’ll keep you in mind.”

After working on this full-time for almost two months, nothing was really happening. I got one tiny job for $800, from which I made $400.

I also bid on another job for $3,500 — which was actually worth twice that. And when I presented the proposal, the owner of the company and his secretaries stared at me, like I was out of my mind asking for so much. Since they wanted me to help them launch an entire new business division for their company on a national level, that left me feeling a bit shaken!

Something was seriously wrong, and I began to slowly realize, day by day, that West Michigan was far behind the rest of the country when it came to marketing knowledge and sophistication.

For example, one of my personal specialties was “lead generation” for business-to-business companies, which makes up 60 percent of all B2B marketing budgets on a national basis. But no one that I met with in West Michigan actually knew what lead generation actually was, and they were supposedly marketing pros. There was only one person I contacted at any local company who had a real lead-generation program in place.

So, okay, I was wrong. There was at least one person.

After all of this effort with terrible results, I experienced one final insight that caused me to change my path entirely.

The Final Revelation

One day I went to a lunch meeting sponsored by the local chapter of the American Marketing Association, and they had a fantastic speaker from a local agency. And by a stroke of good luck, I was sitting right next to him during lunch, after his talk was over.

I was very excited to hear Bill’s presentation, because it was so good. And when he sat down next to me, we started talking. This was the first time I actually met anyone in the area who I considered to be extremely knowledgeable in the field.

He said, “Maybe we could use your services. You should call my partner, Paul, who handles that.”

So I called his partner, and that telephone call forced me to change my approach entirely.

After speaking for a while to Paul, I said, “You know, I’ve been trying to get clients in West Michigan for the past ninety days, and it hasn’t been going well at all. It just seems like this is just not a good market for the kind of services we offer.”

At that moment, there was a long pause on the other side of the line. It was only a few seconds, but psychologically, it felt like half-a-minute.

Then Paul’s voice came back.

He simply said, “Actually, 80 percent of the clients we have are from other parts of the country.”

And then there was another pause.

That was the simple confirmation I needed to hear, and it caused me to shift my entire business approach. When it came to West Michigan, I realized I needed to throw in the towel and give up immediately. As they say now, “fail quickly” and move on.

My Next Step Was a Pivot

After hearing Paul’s words, I knew one thing: I must stop focusing on the local market entirely!

Instead, I kept the business name, redesigned the website, and focused on doing copywriting work — but only for companies outside of West Michigan.

And after making that decision and refocusing my approach, I quickly landed a $6,500 copywriting job from another part of the country.

The problem had been solved!

While the initial business idea had been good — even very good — there was simply not a robust market for what I was offering in West Michigan, despite it’s quality.

But then my book design business really started to take off, and it required my full-time attention. So my related communications businesses were all forced to go into hibernation. As the book-production pipeline filled up, they all went on the back burner.

The Benefits of a Location-Independent Business

Now you can see why I love the location-independent business approach so much.

It’s not just about the personal lifestyle benefits of being able to work where you please and about having the work come to you over the Internet. It’s not just about being able to set your own schedule, or being able to avoid a daily, two-way commute.

The main benefit of operating a location-independent business is that you can get great clients from any location, and not just where you happen to live.

As I discovered, where you live, the economy might be terrible — and the kinds of great clients you’re seeking might not even exist.

Look at it this way. This is a tale of two businesses, both with great offerings, ten years later: Concord Editorial and Design (which creates books for anyone, anywhere): $750,000 in sales. Concord Communications and Design (an equally good business idea, but focused only on West Michigan, where the market was dire): $800 in sales, and closed after four months.

You decide which is better.

— D.R. Fideler

 

Read about D.R. Fideler’s four-week, online masterclass, How to Get Great Clients Anywhere.

It provides the exact, step-by-step blueprints and knowledge you need in order to get high-quality, great-paying clients — and how to get your business booked solid in the fastest, most efficient way possible.

Click here to learn more

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