Business plan competitions are becoming a considerable feature on the startup landscape. Typically they are sponsored by business schools or regional development organizations. The biggest–offered by the State of Michigan is worth $1 million, with the proviso that the business must be in the State or be prepared to re-locate there.
The value of competitions is rising all the time. But the real benefit comes from having to sit down and work out a business plan and to get it done in time for the closing date. Of course, it would be nice to win, but the discipline will have its own reward.
Other reasons why business plan competitions can be very helpful to the entrepreneur include:
- raising free seed capital;
- providing publicity;
- giving validation to help in raising further money or recruiting others;
- coming into contact with sponsors and judges;
- opportunity to develop a good partnership;
- recruit a business school student to join your business;
- learn from other competitors;
- getting guidelines on what investors look for in a business plan.
Generally competitors have to be students of graduates of the university concerned or a resident of the relevant region. But competitions are not always restricted. The B-School competitions are normally geared to the academic year, but if you look at them before the next one is open, that will mean you have plenty of time to prepare. Examples, among many, include
- Babson
- McCombs
- MIT
- Rice
In most cases, the sponsors will lay out the requirements for a good submission, Whether you decide to enter or not, the guidelines in most cases will give you help in the preparation of your business plan. Of course, in most cases you have to be a student or associated with the school, but you might even decide to enroll, given that the top 25 schools offer more than $3 million in prizes.
Many have special criteria–like Tulane’s that is only open to people who can demonstrate conscious capitalism, while there are others focused on social entrepreneurship. Some are organized by angel investor networks, as a means of identifying opportunities for their members. The Clean Energy Challenge is a business plan competition which awards $130,000 in cash prizes to top Illinois clean tech entrepreneurs. Some provide mentors to teams that are accepted for entry.
An essential port of call, if you are thinking seriously about entering or looking for a business plan competition, is BizPlanCompetitions.com. The site was launched in February 2010 by the entrepreneurial team at JFH Innovative LLC, located in Pittsford, New York.
The founder of JFH Innovative LLC is Joe Hurley, who created the website www.savingforcollege.com in 1999 and sold it to Bankrate Inc. in 2007. Principals include Megan Hurley, co-founder and operations chief, and Chris Hurley.
Here are some competitions that illustrate the opportunities for business plans and other venture competitions:
- Brattleboro Development Credit Corporation, Brattleboro (VT), has prizes for existing and startup businesses, with values varying from $1K for finalists to $20K and $10k for winners. Naturally enough, the winning businesses must be located in Windham County, Vermont.
- The California Clean Tech Open invites any team with a bright idea and the drive to start a company to compete for one of six “start-up in a box” prize packages. The competition strives to provide the winner in each category with all the business essentials necessary to help take their idea from concept to business.
- Guardian Insurance grants prizes to 15 girls in the Girls Going Places® program, who demonstrate budding entrepreneurship; are taking the first steps toward financial independence; and are making a difference in their schools and communities. Every year, prizes totaling $30,000 are granted to three top winners and 12 finalists to further their entrepreneurial pursuits or save for college.
- Florida International University’s Entrepreneur Challenge is organized by the Pino Global Entrepreneurship Center.
- LES Foundation Business Plan Competition requires a significant IP content.
- Pitch 2008 is by Women 2.0 whose aim is to increase the number of young women entrepreneurs by encouraging women to work with and in the field of technology. There are two sections, one for business plans and the other based on ‘napkin’ pitches.
- The Rhode Island Business Plan Competition is unique in the northeast (US) in that it is supported by a combination of private businesses, public entities, and nonprofit organizations. It aims to further develop the entrepreneurial spirit in Rhode Island and help create growth companies that will increase local employment.
- Said Business School, Oxford (UK), where entrants must be innovative; be a commercial, for-profit venture; address a 21st Century Challenge; mot have received more than £250K in funding by the submission deadline; demonstrate a positive social and/or environmental impact as well as an economic return. To enter, you start with the submission of an Executive Summary (up to 5 pages) that includes the basic information, the idea and USP, the market opportunity, management team, financial plan, as well as environmental and social benefits. It was worth £65K in 2007.
- The Global Social Venture Competition occurs over three rounds, the last of which takes place at the Haas School of Business at UC Berkeley. During each round of the competition, social entrepreneurs present the social, financial, and environmental values of their business, gaining valuable feedback from and exposure to some of the greatest minds in social innovation.
- The Virgin Earth Challenge is a prize of $25m for whoever can demonstrate to the judges’ satisfaction a commercially viable design which results in the removal of anthropogenic, atmospheric greenhouse gases so as to contribute materially to the stability of Earth’s climate. Not really a business plan competition, but the incentive is huge.
- The Wisconsin Governor’s Business Plan Contest is to encourage entrepreneurs in the creation, start-up and early-growth stages of high-tech businesses in Wisconsin. Contestants have the opportunity to win upwards of $200,000 in cash and services
- An X PRIZE is a multi-million dollar award given to the first team to achieve a specific goal, set by the X PRIZE Foundation, which has the potential to benefit humanity. Rather than awarding money to honor past achievements or directly funding research, an X PRIZE incites innovation by tapping into our competitive and entrepreneurial spirits. Why not aim high?
There are plenty more. A Google search yields more than 5 million responses to a search on ‘business plan competitions’.
Caveat #1: do not risk getting yourself sidetracked by entering a business plan competition if you can get into business quicker without. There will be an automatic delay factor built in, since the competition organizers allow competitors time to prepare their plans and then have to judge the entries and prepare the announcement event that is often very important to them.
Caveat #2: don’t be lured into a competition if you really do not intend to build a significant business. A business person asked me to help him prepare an entry, but when we got right to it, it was clear that he really wanted to build a one-man service, not a company with a life outside his own professional work. We agreed that he had better things to do with his time.
Caveat #3: not everyone thinks business plan competitions are great. Steve Blank is one who thinks No One Wins In Business Plan Competitions. He’d rather see entrepreneurs work on business models, rather than plans than can be stuffed with the obvious and about the knowns of business execution.