For b-schools, incubators and other organizations that support startups, business competitions are very hot right now. For entrepreneurs, they can be great opportunities to flex your entrepreneurial muscles and gain traction for your startup or business idea.
However, with a seemingly endless list of competitions to choose from and limited time, how do you decide which competitions to enter?
Here are five things to consider from Dingman Center Managing Director, Elana Fine:
- Focus on the prize. A lot of competitions advertise big dollar amounts to draw applicants, but read the small print. In many cases, a large portion of the prize money might be the cash value of in-kind services, such as legal advice.
- Judge the judges. Look at who is judging the competition and assess whether they can offer value for you. Are they relevant to you and your business? Could they open any doors for your company? Also consider the types of questions they might ask. Presenting onstage at a business competition can be great exposure, but you are also opening your company up to questions and criticisms from judges. If judges do not know your industry or business, their questions might hurt rather than help.
- Is the application worth it? Consider the opportunity cost of completing the application to any competition. Your time is valuable. Be choosy and apply only to the competitions that have the potential to give your company the biggest boost.
- Winning isn’t everything. Just participating in a competition can be a big boost to your company. Beyond the prize, participating in a competition can open doors with judges and other potential funding sources. Look for competitions that play a strong role in market validation for a company. Look at previous winners to see where they are now. Also look at the media coverage and social media exposure previous winners received.
- Preparation is key. Competitions can be a warm-up act before presenting to investors, so think through your customer acquisition strategy, financial projections and use of funds. Be prepared to make requests of judges beyond the prize money because customer leads and other introductions might be more valuable than cash. Take advantage of any coaching and prep work offered by the competition sponsors and host.
Remember to keep these tips in mind the next time your startup is thinking about entering a business competition.
Applications are now being accepted for the March 4 Pitch Dingman Competition, where UMD student entrepreneurs will compete for up to $3500 in cash prizes. Interested? Apply by Monday, February 16: ter.ps/pitchcomp.
Elana Fine is managing director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business. She regularly contributes to the Washington Post’s Business Rx Section. Excerpts from this blog post were drawn from her recent article, “Five things to consider when entering a business competition,” published on February 6, 2015.