The first $10,000 Kris Appel deposited into her business checking account comprised her winnings from a local business plan contest. With that money, Appel, founder and president of Encore Path, a medical device company, was able to hire the attorneys and FDA consultant she needed to develop her flagship product: the Tailwind, a rehabilitation device that assists stroke survivors in recovering arm function. Appel continued to enter competitions--and win them--throughout her company's first year of product development.
What prompted you to enter a business plan competition?
In 2006, I got into ACTiVATE, a women's entrepreneurship training program offered through the University of Maryland. They told us about a business plan competition in the state of Maryland for women-owned companies. It consisted of submitting a written business plan and then being called back to make a presentation to a panel of judges. In March 2007, I won first prize: a check for $10,000. That unrestricted "free" money was crucial in getting my company going. A few months later, I entered another local business plan competition through the MIT Enterprise Forum and won first place as well. It dawned on me that I should keep doing this.
How did you find more contests to enter?
I started Googling "business plan competitions." I looked for life sciences competitions, medical device competitions, women-owned business competitions, competitions for Maryland companies--anything I thought I could qualify for. A lot of alumni groups and universities have them. With every competition, step one is "Send us your business plan." So I got in the habit of updating my business plan every month. You also have to spend time filling out contest applications. But two hours on an application might lead to a check for $5,000.
How many did you enter, and how much did you win in all?
I entered eight competitions, won two and came in second or third in three others. I won more than $20,000 in cash and services. The second contest I won, the prize was a choice of professional services. I worked with a senior marketing person from a well-known marketing agency. He helped me with the name of my company and the name of my product, which were key things for me.
What are the nonmonetary perks of winning?
Winning a business plan competition gives you credibility. The judges tend to be funding sources: state agencies, investors, venture capitalists, economic development officials. Most business plan competitions are highly publicized, too, so the winners get press attention. And the validity you get from the competition and the press attracts other attention. In 2008, shortly after winning my second competition, I obtained funding from the Maryland Technology Development Corporation, a state agency that's one of the leading funders of startups in the U.S., to begin the engineering process for my product. The loan was for $75,000. That's not collateralized.
How can entrepreneurs improve their odds of winning contests?
Get some coaching on refining your written business plan and making a great presentation. There are a lot of state agencies that can help. Then, start researching the competitions. You might find one in another state, but it might be worth traveling there to win $10,000. If nothing else, it's really good practice for your investor pitch.