The coming wave of business plan competitions

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Our crystal ball sees a wave of new business plan competitions coming. These will be the creations of local economic development agencies looking to stimulate business expansion in their communities.

Of course, it’s already happening to some extent. We have seen several new competitions launched over the past year by cities, towns, regions, and states. (See Statewide Entrepreneurship Competitions on the Rise). But of the thousands of local development agencies across the country, there are currently only a few dozen hosting annual business plan competitions. The potential for more, obviously, is huge.

Few people will argue that business plan competitions are the most effective way to attract new businesses to the local area, or to stimulate the expansion of existing businesses. They are just one more tool in an agency’s economic development toolbox of incentives and programs.

But such events can help increase the level of community interest and involvement in local economic development efforts. Unlike other incentive programs involving loans, grants, or tax breaks, business plan competitions are open and transparent, and they offer a certain level of excitement as well.

Putting on a business plan competition generally requires a significant effort: establishing the rules, promoting the contest, coordinating the responses, holding educational sessions, assembling judges, soliciting sponsors, and staging the final presentations and awards. (But it doesn’t have to be so ambitious – see Starting Small With a Biz Pitch Contest.)

A great example of what we are predicting comes from Lewiston-Auburn, Maine, where the L-A Economic Growth Council has just announced its inaugural business plan competition. The group is seeking to raise a cash prize pool of $20,000 plus $80,000 in services. The winners will be selected by online voting from the L-A community, ala American Idol. While we are always a little leery of vote-based competitions, which can turn into social popularity contests marked by pitiful pleas and ballot stuffing, this approach may succeed in attracting more attention to the contest.

Photo credit: garryknight

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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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  • Business Plan Resources

    Do you have a business idea or want to enter a business plan competition but not sure where to start? See our list of must-read business plan resources.