There's an air of optimism about a business plan competition. Teams bustle along, rehearsing their business plan presentations before delivering them to illustrious judges who not only have business acumen, but are also often connected to large VC firms. Permeating every conversation is a we-can-do-it attitude. Business ideas can range from the highly technical biomedical industry to the more ethereal creative arts arena. Yes, the competition part of it can be nerve-wracking, and the judges are not what one would call an easy audience. Still, it's a great opportunity to win cash and prizes for your business and get pitch time in front of actual VCs--and it's also a huge learning experience from start to finish. It may very well be in the drinking water at a business plan competition, but the general attitude is this: No matter what happens, we'll build a business.
The good news is that these hotbeds of entrepreneurial inspiration are taking place at more venues across the country (and the world, in fact). A large percentage of business plan competitions are associated with university MBA programs, note experts, but a fair number are also produced by communities, open to anyone in the local area or to businesses of a certain type to encourage economic growth. "There are definitely more open competitions," says Mark Cannice, director of the University of San Francisco (USF) Entrepreneurship Program. "As the word spreads about allowing [people] the opportunity to develop a complete business concept and offer it to professional investors and executives, I think that experience has been so powerful and fruitful for so many...I think the demand for most universities to have [competitions] seems to be increasing as well."
To successfully enter the business plan competition fray, know these caveats: Decide if you can enter a university-sponsored one (usually, someone in your management team is required to be an MBA or a graduate student). If your team has no MBAs, you might be able to enter a community or corporate competition with many of the same benefits.
The real test, though, is the future success of business plan competition winners. Do they make it past the startup stage to fulfill their competition-era promise? For Chad Joshi, winner of the WPI Venture Forum Business Plan Contest in Worcester, Massachusetts, in 2000, the potential that judges saw in his business has certainly been fulfilled. The WPI contest, affiliated with the Worcester Polytechnic Institute, is open to any technology-based startup or pre-startup in New England. Joshi, founder of Energen Inc., began laying the groundwork for his company in 1996. The Lowell, Massachusetts-based company manufactures precise motion control products often used in scientific research and optical equipment.
Still in the R&D stage of his business, he first entered the competition in 1998 and came in third. "It was a good learning experience," says Joshi, 46. "I got to meet with the people that reviewed my business plan." Getting valuable feedback, he entered again in 2000 and won that year's first prize: $10,000 ($5,000 in cash and $5,000 in services from various sponsors).
It was just the boon his company needed. "Certainly, it got the attention of the VC community," notes Joshi. "They were much more interested in hearing our story and what we wanted to do." The connections he made through the contest were invaluable, too, as many of his contacts ended up offering good business advice and mentoring his company through its early growth. Today, projecting sales between $1.5 million and $1.7 million, Joshi reflects on what a positive experience a business plan competition provides for aspiring entrepreneurs. "It's a very good way for new people to learn about building a business," he says. "If I had a different business that I was looking to get off the ground, it would be a great way to get exposure."