There ought to be labeling laws for business plan competitions.
Well, maybe not – we probably have too many laws already. But what strikes us as a bit odd are some of the contests we see promoted “business plan competitions” that stretch the definition.
For example, we recently noticed the Industrial Development Authority of Danville, Virginia publicizing a new business plan competition for area businesses. What do the “winners” get? Loans that have to be paid back within two years, along with interest.
Granted, many cash-strapped small businesses would be grateful for a loan when so many banks have now turned backs on them. And because Danville is supplying the loans with federal funds (leftover USDA grant money), the interest rate is a relatively low 4 percent annually.
But to win this competition, interested businesses simpy submit a business plan with their application and wait to hear if they have “won.” Sounds pretty much like any other low-interest loan program where there is not enough money to satisfy the demand from eligible borrowers, doesn’t it?
In our view, a business plan competition is an event where an independent panel of judges, and not an IDA board or group of salaried employees, determines the winners. And the prizes are things that don’t have to be repaid – like cash, in-kind services, and incubator space.View all posts by Megan Hurley → This entry was posted in Featured Posts and tagged featured. Bookmark the permalink.