The secret of breaking in — Creative ‘risk’ taking

In 2000, I decided to expand my business to the Washington DC area.  At the time, our Canadian business had some profitability, but certainly we weren’t rolling in dough.  In fact, after deciding we could make the move, but before moving forward, I experienced some real business scares.  Then, the business didn’t have proper systems and processes (which is why the U.S. expansion ran into serious problems five years later).  Our available capital for the experiment: About $20,000.  And outside of one of my wife’s uncles, long-retired  from the World Bank, I had no personal connections or relationships in Washington.

So how could a Canadian, with virtually no cash and no useful relationships in the market area, even think of starting business in one of the largest US markets and certainly one of its most famous?

To answer this question, you need to understand the principal of creative ‘risk’ taking.  ‘Risk’ is in quote marks because the risk is more in others’ eyes than yours.  In other words, the action looks really risky, but it isn’t.  Other words to apply:  Audacity, uniqueness, cheekiness, and (a Yiddish word), Chutzpah.

Here are the foundations of my initially successful launch in Washington.

A formula and methodology of sales which (at the time) reduced resistance, shortened the sales cycle, and allowed us to get our foot in the door quickly.

At the time, in the early part of the last decade, relatively few publishers had discovered the consistent and effective potential of supply-chain marketing; namely connecting relationships with clients and suppliers, and offering suppliers the opportunity to support their clients through systematic advertising in construction industry publications.  Certainly, few if any were doing this sort of thing in the local area when I checked out the Washington market.  (Things have changed, and the sales model we use, while still effective and valid, has to correlate with real commitment and respect to the community — I don’t think I could fly in and do the same thing now.)

A unique product/service (in the niche)

Certainly some major publishers had regional construction industry magazines and newspapers, and several leads services offered publications with future project information, but for some reason, they left a hole in the market in the Washington area.  I discovered this during a one-day initial fact finding mission.  I met my wife’s uncle for lunch and the visited a few local construction association branches, asking the managers if there were any local publications of the type I envisaged, and whether they would be supported in the market.

(There is a risk with this type of market research.  A few years later, I used the same research technique when wee were planning an expansion to Atlanta.  I needed to put the project on hold for several months; by the time we started, someone had established a publication with an eerily similar concept — I suspect, based on the sample copies I had left with one of the association representatives I met.)

Lucky connections

Although I initially thought I had no connections in Washington, it turns out I wasn’t 100 per cent right in that assumption.  One of my former editors had moved to Washington and I connected with her.  She volunteered that she had a friend who might be ideal for the salaried sales start-up opportunity we offered.  And, after some back-and-forth “dancing” she decided to work for us with a modest starting salary.  Like others, she felt the excitement of starting a brand new publication in the U.S. capital, and probably thought it somewhat amazing that a Canadian entrepreneur would dare open his U.S. business in the center of the American political adventure.

Appreciating the rules

I checked and discovered that the then recently-implemented North America Free Trade Agreement specifically encouraged and allowed cross-border business expansion, including the allowance of special work permits and visas for entrepreneurs preparing the business expansion.  (I obtained my permit an advertising trade-out with an immigration consultant seeking to help Canadian construction businesses cross the border).  I also connected, after a few interviews, with highly competent U.S. lawyers and accountants, who we still use for professional guidance.  They, and my own reading, quickly helped me to understand the things to watch out for and the opportunities to grow.  The U.S. bank we use, Suntrust, assessed me as a high  potential client and assigned me a private banker.  (Somewhat shocked about this attention initially, I then realized that I had managed to tap some awe effect — so this Canadian is really going to start a business in the U.S. capital city area; he must have deep pockets, or if not, real potential.)

With the pieces in places, I offered employment to our new local publisher, and we set out to find clients — and within a week, we had enough sales to know we could succeed.

This story isn’t totally happy; I made many mistakes along the way.  A battle against high air travel costs between Ottawa and Washington (most people using this route for day trips are government people and expense-account lobbyists, so fares were inordinately high) turned into a major obsession and distraction which drained my energies from the real business at hand.  I also didn’t have suitable management controls or systems to realize why or how market shifts and employee performance could be effectively managed.  Our product grew stale, and we lacked the right level of client service and respect.  In other words, we weren’t really ready to run the business I had started.

But, nevertheless, I had managed to enter a major and high profile market, with virtually no money and almost no connections.

So if you want to try something that appears dangerous, you can succeed,  but you need to think differently than any textbook will suggest.  Essentially, you need to go out on a business limb which looks far riskier and more dangerous to everyone around you than you really know to be the case.  Then you are the daring business entrepreneur worthy of respect and opportunity, even if you are doing the thing with $20,000 and some seat-of-your-pants imagination.

Certainly, I have made many mistakes along the way, and the original Washington venture is no longer viable.  But it provided the basis for our current project, the Design and Construction Report. And I’ve sought to remember and apply the risk-management and principals for the original Washington enterprise in the new business.  The difference:  I’ve combined my audacity with experience, and have discovered that simple business systems and controls don’t stifle creativity, but improve security and reduce risk even more.

This, in part, is why I recommend Bill Caswell‘s program, Taking Your Construction Business to the Next Level, which you can research by clicking on the sidebar posting.