Hundreds of business plan competitions throughout the U.S. award tens of millions of dollars to entrepreneurs who have what it takes to enter and win. Even more valuable than the funding may be the contact with potential mentors and the publicity that attaches itself to overcoming the long odds and triumphing in a big competition.
“It gives you a lot more national recognition than being an aspiring entrepreneur working alone in your garage,” says Susan Scherreik, director of the Center for Entrepreneurial Studies at Seton Hall University, of entrepreneurs who win business plan competitions. The university sponsors its own annual business idea competition called Pirates Pitch that awards $10,000 in prizes plus a grab-bag of business services to two winning teams.
Win or lose, entrants also get valuable opportunities to polish their elevator pitches and presentations before professional evaluators, says Scherreik, who feels that face-to-face meetups have retained their value despite the ever-growing importance of virtual communication. As she explains, “People need to make those human connections.”
A Winning Plan
Joey Roth has done well at three of the four business plan competitions he’s entered, mostly recently in the $20,000 BETA Challenge held by entrepreneurial education powerhouse Babson College. Roth, who graduated from Babson in 2014, scored first as a freshman with a business plan built around a Web application that won him $500 in the Green Rocket Pitch competition.
“It wasn’t much, but it gave me the concept that I could win one of these things,” Roth says. Later, he made it to the semifinals of a much richer contest sponsored by MillerCoors that hands out as much as $50,000 to winners.
Clearly, Roth knows what it takes to win these contests. So what are his top strategies? He credits a combination of good timing and good storytelling for the BETA win. OrangeOctop.us, the company Roth was pitching in his most recent winning business plan, publishes strategy guides for FIFA soccer video games.
Roth says he pulls contest judges in with a narrative of how he started his business over a single weekend back in 2012. Facing expulsion from a Babson dorm restricted to students who had just started at the college, Roth hastily identified that day’s bestselling products on Amazon—at that time, the recently released FIFA soccer video games—and crafted a plan to hire professional gamers to write strategy guides to sell to aspiring FIFA video game players. By Monday morning, Roth had a business, a market, a product and, soon, sales. “The costs were nothing," Roth says, "and in its first year, it did tens of thousand of dollars.”
Got What It Takes?
Scherreik agrees that Roth’s ability to craft a beguiling presentation probably has a lot to with his wins. “You have to have a great idea,” she says. “Some proven success is also great, but having a great pitch is really important.”
It’s not all about spinning a compelling tale, however. Roth says that in addition to the narrative description of his business, he was also required to put together more conventional pitches. “You still have to have the PowerPoint decks and 20-minute presentation and all that,” he says.
And you don't have to win to benefit: Even losing business plan contestants get value from the experience because they learn to hone their narrative, presentation and business planning skills—skills that will serve them well if they go on to become business owners, Scherreik says. Entering a contest, she adds, is an important part of the process of turning would-be entrepreneurs into actual entrepreneurs. “One of the best ways to start is to go into a structured forum,” she says.
Since launching OrangeOctop.us, Roth has come out with guides for subsequent FIFA soccer video games as well as for other video games, including NHL 14 and Watch Dogs. The company has generated enough work to keep a stable of freelance writers busy while Roth, the company’s only employee, completed school. With the company now based in San Francisco, Roth says his business recently had its best month yet. His long-term plans involve bulking up the OrangeOctop.us list of guides and ultimately creating a major global publishing enterprise.
The capital and contacts he gained from winning business plan contests significantly helped him on his way, Roth agrees. But, just as important, entering those contests forced him to contemplate what he really was doing.
“When you enter one of these competitions, you spend a lot of time thinking about the future and what you stand for,” Roth says. “I think that’s very important for a business generally—to have a vision. That’s what a business plan competition forces on you.”
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