In this tough economic environment, aspiring entrepreneurs’ and current business owners are having difficulty securing capital for their business. There are several alternative sources of financing than traditional financial institutions, but one alternative that gets overlooked are business plan competitions. Unlike bank loans, this form of financing involves the least amount of risk to you and your business. Business plan competitions typically do not require you to show your credit score or put up collateral. There are no penalty fees and you are not required to repay anything you win.
There is a misconception that business plan competitions are only for college students. Although a majority of competitions are for students, there are competitions out there for everyone. Competition requirements and prizes vary, so take the time to find the competitions that you are eligible to enter into. Biz Plan Competitions is one online service that lists a variety of business plan competitions in addition to a competition’s eligibility requirements and submission deadlines.
Amazon Web Services LLC, featured on Biz Plan Competitions, offers an annual Start-Up Challenge that does not require being enrolled in college. To be eligible for the AWS Start-Up Challenge your company “must not have generated more than $10 million in gross annual revenues or outside funding.” In addition, you must be located in any of their 22 eligible countries and currently using the Amazon Web Services. The winners of the AWS competition are given a cash prize, AWS credit, support services for a year, and mentorship.
Also featured are competitions for specialized industries such as the Heinlein NewSpace Business Plan Competition, ImagineH2O Water Energy Nexus Prize Competition, and the AUTM Venture Pitch Forum. There are competitions for women and minorities including the African Diaspora Marketplace II competition and the Women 2.0 Pitch Start-Up Competition. It is just a matter of finding the competition of which you are eligible.
Writing a business plan can be time-consuming and often times tedious, but the benefits outweigh the time you take to create it. While the most rewarding aspect of business plan competitions is cash winnings, there are several other advantages. According to Amy Buttell, author of 5 Reasons to Enter a Business Plan Competition, competing gives you a deadline, advice, an opportunity to hone your skills, pitch multiple concepts, and network; all can work to your advantage.
Having a Deadline
Business plan competitions always have submission deadlines that competitors must adhere to in order to compete. The deadline can be the spring-board for you to get started on planning a new business venture or expansion. It motivates you to get your ideas organized into a coherent written form. Creating your business plan, ultimately, shows that you know what you need to start or expand your business.
Many competitions offer a variety of support services to entrants such as seminars and forums. These resources can assist you in writing your plan, getting feedback, or to create networking opportunities. The African Diaspora Marketplace offers competitions resources through their website, such as small business development tools with links to writing an effective business plan.
Honing Your Skills
There are always opportunities to enter competitions that correlate with skills you already possess. Buttell says, “Some focus on elevator pitches, others focus on social media while still others focus on the venture capital end of startups”. MIT offers an Elevator Pitch Competition with cash prize awards of $20,000. If your strongest skill is communicating an idea to others, than an elevator pitch competition may suit you.
Pitching Multiple Concepts
There are so many competitions out there for entrepreneurs’ to use to their advantage. If you have a plethora of business ideas, you do not have to limit yourself to submitting the same concept to each competition. You might take advantage of the Amazon Web Service competition to create an online business while entering a proposal for an energy-saving product in MIT’s Elevator Pitch Competition.
Finally, business plan competitions allow you to network with a variety of people who could potentially invest in your business. According to Buttell, “Even if you don’t win, you can network with teammates, professors, judges and other entrepreneurs”. The people you meet may be useful in the future, so it is important to start building relationships during networking opportunities.
Ultimately, you should ask yourself what your goal is when entering a business plan competition which may be to win money or get exposure for your business. No matter your goal and regardless of the work you have to put into business plan competitions, it is a rewarding experience for any entrepreneur.