I was sent a post about business buy topamax in canada plan competitions written by Lora Kolodny from the You’re The Boss blog at the New York Times over the Holidays.
It poses a question that we really know very little about — are business plan competitions a good or a bad thing?
Kolodny offers a variety of opinions on the topic from various academic-types, but does not draw a firm conclusion.
Here is my take.
I think business plan competitions serve some useful purposes:
- They force entrepreneurs to carefully think through their plans. Knowing experts will scrutinize their business models and financials forces entrepreneurs to take a few more important steps to validate their business plans assumptions.
- They give entrepreneurs experience in selling. Whether it is to a panel of judges, a group of investors, or that first customer, business plan competitions put the entrepreneur in the position of having to see their product or service to a skeptical audience. The more practice at selling the better!
- They expose the entrepreneurs and their ideas to a wider world. I have seen many an entrepreneur connect with people who eventually help them with money or a wider network through participation on plan competitions.
- They can put some badly needed cash in the bank accounts of start-up ventures. Joe Keeley, one of my former students, funded much of his start-up period of College Nannies and Tutors through the prizes he won in various business plan competitions.
There are some downsides to business plan competitions, however:
- Some entrepreneurs get so wrapped up in competitions that they take their attention away from what needs to be done to create a successful launch. In some it is as if they see winning competitions as the purpose of the business. It is not unlike entrepreneurs who get too fixated on raising money and not building cash flow through sales.
- Business plan competitions can also create too much emphasis on the plan itself. While I am not one who thinks business plans are unimportant, I do think that we worry about the finished plan all nicely bound with a pretty logo on the cover more than planning process, which in the long run is what really matters. By only working toward a really killer plan, we can create a static document. New ventures are dynamic and so should the process of planning that supports their creation and the management of their growth.
- Competitions can also create a short-term mentality tied simply to winning the competition, rather than the long-term focus on building successful businesses that create jobs and wealth.
Are business plan competitions overemphasized? Yes. But, I will continue to encourage my students to compete in business plan events.
However, for our students business plan competitions are only one small part of a much more comprehensive set of activities and experiences that will better prepare them as entrepreneurs.
(Thanks to Tom Swartwood for passing this along).