Monday, September 14, 2009

You scratch my back, I’ll scratch yours: A guide to business plan competitions

A year ago while starting EasyPlug at UBC we had access to a great network. From professors and recent alumni to local community leaders which provided an edge. We knew that it was in our best interest to work together with the University for as long as possible, but it was also in the universities best interest to help new talent. For every successful company launched brings credibility to the New Venture Design program, and other programs run by various faculties. This credibility allows for steady funding and eases recruitment of the best students, along with recognition in the local business community.

We found the best way of leveraging this relationship was business plan competitions. Every new start up should enter a competition or two in my opinion; they exist in both the academic and business communities. Why? Because they have free money and free publicity! When starting a business you often have limited resources and some costs are inevitable (legal, materials, etc) so developing a small cushion is a big advantage and can delay the issuance of expensive equity. Business Plan competitions also provide an area for your ideas to be critiqued, and steadily improved with each passing round. Each time you present in front of a new panel you become more relaxed and judges ask different questions. Often you have improved your presentation between rounds but you quickly realize that entrepreneurship is a perpetual learning curve. You constantly need to expand on your most recent work.

So where does the relationship with the University enter the picture? Well there are two main areas funding and expertise. Most student business plan competitions require travel to nearby cities which can eliminate the possibility without funding for many students. (This is also a great opportunity to travel and see the nightlife once the competition wraps up. The story of how we ended up at a Raptors game and then saw the starting lineup at the club that night is a worthy of its own blog post!) Industry competitions tend to be local and a small fee is all that is required to supplement your submission, furthermore they provide a great way for students to meet people in the business community. Universities also help with expertise, when you’re entering a competition is takes a significant amount of work to be competitive. An excellent way to advance your submission is by discussing your application with Faculty members that specialize in your specific area.

So how does the University Benefit? Although the upside for student teams is significant; Universities often enjoy the publicity and student development is part of their mandate. At all competitions we were and still are happy to affiliate with UBC and discuss ongoing programs being run at the university. The key to developing a successful team/university relationship is winning, which is easier said than done. Once you win your first competition you are more likely to receive funding for a second, and then once you win again you are more likely to be written up in the university’s publication which helps both parties.

Competitions become easier with time, 80% of the work is creating the initial business plan. It will be a slow process if it’s your first and will require extensive research. Then with each round you improve the plan, this makes it easier to enter later competitions. Occasionally a total ‘overhaul’ is required as the plan begins to lose it’s consistency after multiple revisions, the worst thing you could do is say my business plan is complete. Plans are as dynamic as the businesses themselves and therefore must always be adapting to new challenges.

Pick your competitions. We conducted extensive research about competitions all across North America looking for the biggest cash prizes but unfortunately most of these competitions focus on the graduate level programs. Although we did find enough competitions that we were kept busy applying and competing for over 6 months. To apply for the graduate level competitions we found a friend that allowed us to use his name on the application, a trick that is worth a shot but probably won’t lead to acceptance. My advice is select three or four, and focus the remainder of your time on business development. We entered the rhythm of perpetually modifying the application and sending it off to a new competition. There also comes a point when you need to stop competing and start doing which is the stage EasyPlug is at right now. (At this point shift you attention to grants, another form of free money and leverage you business plan which has by now been improved significantly.)

And the best thing about competitions is free money! It’s not a loan, you don’t lose equity it’s just free. So compete while you have time and maybe you’ll have a chance to buy some lab equipment and pay your lawyers to get you started. Below are links to a couple competitions in the British Columbia area. If you’re planning on applying and need some advice here feel free to e-mail me. Also feel free to comment with other great competitions and I will add them to the links.

Industry Links:

New Ventures BC

TiE Quest

Small Business BC

Student Links:

Enterprize Canada

PolyU Hong Kong Competition

VSEA Bright Ideas Competition

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