Every new business needs money. Whether you’re just starting a business or have plans to open your doors in the near future, you’re likely a little short on money but full of dreams and ideas.
The problem of funding doesn’t have an easy answer. On one side, “bank” is still a word that ignites a good healthy hate in the minds of many Americans due to the events of 2008 and 2009. Because of past lending standards that were much too lax, banks have now gone in the other direction. Very few businesses can get bank loans and those who can are established businesses with cash flow and assets to put up as collateral.
Venture capitalists and angel investors don’t invest in early stage businesses and often want to make large investments that come with stipulations that you may not see as appropriate for your business.
What you need is money without any strings attached. It might sound like a pipe dream but here’s one way to possibly score some free cash: Business plan competitions.
How they Work
According to American Express, there are now more than 400 business plan competitions in the nation. You can find a lot of those listed at businessplancompetitions.com but the best place to look is your local business development center. Most competitions are designed to help businesses in the early stages of development further refine their business model but some do allow existing businesses to enter
Of course you’ll need a well-crafted business plan but more important, your plan has to meet the contest’s formatting requirements. Some will ask for no more than an executive summary but most will require 20 pages or more with specific sections laid out in a certain order. If you include sections that weren’t requested or you leave out parts that were required, your plan will likely be disqualified from the competition.
You don’t have to win the competition to gain benefit. Not only will your plan be reviewed and critiqued by other successful entrepreneurs, you’ll likely gain exposure in your local businesses community and as every entrepreneur will tell you, you can never get enough free advertising.
Finally, don’t think that your plan will be one of hundreds that enter. Data suggests that most competitions have around 60 entrants but some may only have a dozen. A well-crafted plan that follows the requirements has a great chance of winning the average prize of $10,000.
If you haven’t started your business, or even if you have, look for business plan competitions in your area as well as nationally. Applying for free money and having a critical read of your business plan by a panel of successful entrepreneurs is well worth your time.