Last night I was at the 2007/08 launch of the Melbourne University Entrepreneurs’ Challenge (MUEC), one of Australia’s premier business plan competitions.
There are a host of business plan competitions around Australia (e.g. RMIT, Swinburne, UQ) and the world (e.g. Harvard, UC Berkeley, Oxford), and the number is growing rapidly. A Business Week article last year cited over 350 business plan contests globally in 2006, double the number that identified in 2002.
How do they work?
A typical competition involves a number of stages, including an initial concept outline, a full business plan, and (for finalists) the opportunity to pitch to venture capitalists and other potential investors.
Various training, mentoring and networking opportunities are provided along the way to help contestants form a team, develop their concept, and prepare for the competition milestones.
What’s the benefit?
While most business plan competitions offer $10,000 or more in prize money and in-kind services, the main benefits for participants (even the winners) are experience and contacts.
Of course, winning has its advantages (e.g. Dynamic Hearing has licensed its technology for hearing aids), and even being a runner-up can help (e.g. Southern Innovation received funding from one of the judges).
But it’s worth remembering that winning ain’t everything. A great business plan does not always lead to a great business. And sometimes a plan that failed to make the finals becomes a thriving business (e.g. Komodo CMS).
Taking a broader perspective, business plan contests help connect and encourage people who share a passion for entrepreneurship. Compared to other places (most notably San Francisco), Australia’s entrepreneurial community is relatively undeveloped. So, to my mind, this makes events like MUEC even more important.
Should you enter a business plan competition?
If you’re an established entrepreneur, with a track record and good connections, I’d say don’t bother. Just get on with launching your business … and consider offering your services as a judge or mentor!
But if you’re an aspiring entrepreneur, taking part in a contest can provide valuable experience and contacts. And while most competitions are affiliated with a university, you often don’t need to be a student yourself – just make sure you’ve got one or two people from the relevant institution in your team.
* If you’ve entered a business plan competition previously and want to share your experiences, please get in touch at latentfuture (at) gmail (dotcom).