Xcode 4 adding dylib

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I am trying to create and then add the dylib to a project. I created it by using the "Cocoa-Library" template and setting the type to "Dynamic" (not sure if it should be dynamic or static...). Then I created a simple obj-c class called Test and wrote a method in it that prints out something to console.

I compiled and used the generated .dylib file and put it in another project. Now whenever I try to use it, I get this message on runtime"

dyld: Library not loaded: /usr/local/lib/TESTLib.dylib
  Referenced from: /Users/***/Library/Developer/Xcode/DerivedData/TestingDYLIB-axmoocnxbwznoyerfogosumqufxc/Build/Products/Debug/TestingDYLIB.app/Contents/MacOS/TestingDYLIB
  Reason: image not found

I also created a Copy File phase and set the destination to "Frameworks". I still get the same error. What am I doing wrong?

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