Why we enter business plan competitions

Update: Subsequent to this article being published, The Lawyer Market went on to win the Consumer/Web Technology division of the University of San Francisco International Business Plan Competition. Congratulations to The Lawyer Market!

By Jian Yang, CFO of Leximetrics LLC

When starting a business, many people wonder whether business plan competitions are worth it.  The benefits to wining are clear, the winners win cash that can be used to fund the venture.  Yet, there can only be one winner, and these competitions can be time intensive, so are there benefits to simply competing, even without winning?

We started The Lawyer Market, a free website that helps people find lawyers that will work within their budget, in 2009. Currently, we have entered three competitions, so it would seem the simple answer is yes.  However, we decided to hold off on competitions until now.  As a startup, it’s important to prioritize your time and efforts.  Sure, winning 10 to 20 thousand would be great for our business, but not at the expense of establishing our brand or keeping ahead of our competitors, especially when the chances of winning are low.

Naturally, this leads to the question of why now?  We view these competitions as a great networking tool and feedback mechanism.  As we are currently in the process of trying to raise financing for our company, the opportunity to meet, network, and pitch to potential investors is invaluable.  We might not be guaranteed to win, but we are guaranteed investor time and attention.  Anyone who has gone through the process of fund raising knows how valuable this exposure can be.  The other key benefit is the feedback we can obtain from judges, who often are the very venture capital or angel investors we want to impress.  This allows us to perfect our business plan and quick pitches.  Venture capital firms get thousands of applications a month, so it’s critical to put our best foot forward when submitting business plan proposals.  Hence, having a business plan that has already gone through several iterations increases our chances of catching their attention.

Ultimately, as with any task, entrepreneurs should ask themselves what their goal is when entering a business plan competition.  Are you trying to win money, get exposure, both?  We believe that while time consuming business plan competitions are a great forum as part of the fund raising process for a start up venture.  We consider it a low risk way to meet potential investors, with the cash winnings simply a bonus.  To that end, The Lawyer Market plans to or has entered three competitions:

  • The University of San Francisco (USF) International Business Plan Competition with a grand prize of $10,000
  • Tulane Business Plan Competition with a grand prize of $50,000
  • Tepper School of Business McGinnis Venture Competition with a grand prize of $20,000 in investment and another $20,000 in services

We have successfully made the second round of the USF competition.  Follow our progress on our blog.  And for those entrepreneurs who may have questions or need legal services, please feel free to contact us or visit our website.  Good Luck!

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Joe Hurley is a CPA, author of "The Best Way to Save for College - A Complete Guide to 529 Plans", founder of Savingforcollege.com, and co-founder of Bizplancompetitions.com. He has also recently started making maple syrup.
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