Home Articles How to win a business plan competition

    How to win a business plan competition

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    You’ve written your business plan, spent hours agonising and estimating, but are you sure it’s a clear winner? There are two ways to find out: execute it (we wish you all the best) or enter a business plan competition and test it on a panel of experts. Winning entrants get fame, fortune and feedback of the highest order. To make your business plan a blueprint for success – find a business plan competition, get in it and win it! By Jodie O’Keeffe.

    At first, entering a business plan competition might seem like extra work, and let’s face it, most entrepreneurs have enough on their plate. Filling out application forms, finessing your business plan (or in some cases starting from scratch), putting together a presentation, committing days, nights and weekends to your team when you might already be in the dog house at home. You have to ask yourself, ‘Is it really worth it?’

    For those entrepreneurs highly committed to making their business a success, the answer is always a resounding, ‘Yes!’ Not only will your business benefit from a finely-tuned plan, participating in a business plan competition rates as a first-class learning experience. Running your business proposition past a panel of industry experts is not a daily occurrence for most aspiring entrepreneurs. So every entrant benefits, but if you’re going to be in it, you want to win it, right? In seven simple steps, here’s how…

    STEP 1: Start it up

    While there’s definite merit in the academic exercise of putting together a business plan and pitch, the winning teams are often those firmly entrenched in start-up mayhem, the ones learning the hard way.

    In December 2007, three Bond University students took out the prestigious John Heine Entrepreneurial Challenge (JHEC) with Amiellen, a wholesale and distribution company selling hand-sanitising products through vending machines. Team member Richard Brimblecombe works full-time on the business while completing his Executive MBA studies.

    “We put the business plan together in a very authentic way and the data supporting the plan was very firm because we were living it. We were very relaxed about our ability to answer any questions,” says Brimblecombe.

    Fellow team member Craig Duncan adds: “For proof of concept, there’s nothing surer than orders on hand or completed sales. This is our forecast. This is what has been delivered. Here is our actual product. We had a realism that perhaps the other teams couldn’t deliver.”

    Similarly, Mark Bathie, founder and CEO of CVSDude, 2008 winner of the $100,000 University of Queensland Enterprize Business Competition, says existing revenue streams played a large part in his team’s win.

    “During my presentation I displayed a graph with a single line climbing upwards over time. That was actual revenue. I think that made us really stand out in front of the competition,” he says.

    STEP 2: Be passionate

    Bob Christiansen, founding Managing Director of Southern Cross Venture Partners and long-term judge of Enterprize, knows a thing or two about backing winners.

    “Really show you’re passionate about your business. The investor wants to know that when the going gets tough, you’re going to stick with it, not bail out at the first opportunity. Speaking as an early stage investor, we hold our investments for four to seven years. That’s longer than a lot of marriages. It’s very much about the people and the chemistry and the fact that you’ve got a passion for the same thing.”

    For Koshala Canagasooryam, this passion is intertwined with belief in self and concept. She was part of 2007 Monash New Enterprise Challenge and 2007 JHEC winning team Zipper Enterprises.

    “You don’t want to lack confidence. It’s okay to be nervous, it’s a competition, and they expect you to be a bit nervous. But if you don’t believe in yourself there will be no passion. There has to be passion. You can’t fake it because the judges see through it. What sold us with the judges is that they saw each of us believed in it,” she says.

    The Zipper Enterprises entry began life as a way for four Monash MBA students to gain experience in developing a business plan. One of the team members had created a new water sports product, the Zipper Board, as part of a backyard project and decided to use it as the basis for the business plan.

    “A third of the way through the plan, we decided ‘Hey, we can do this as a business’. It was no longer just a competition, it became a business. That’s when the passion came in,” says Canagasooryam.

    STEP 3: Recruit a well-rounded team

    Any business (and therefore any business plan competition entry) relies on the ability of the management team to develop and execute the business strategy. To maximise your chance of success, select a team with complementary skills covering all aspects of the business. For two-time winner Zipper Enterprises, this meant scouring the MBA class for suitable CVs.

    “We had an architect – he was the product designer, an administration guy, a finance guy and I did the marketing. Our strategy was to recruit a team with the four cornerstones of business,” says Canagasooryam.

    Richard Brimblecombe from Amiellen agrees. “The secret to our success was that we had a team-based approach. We sought input widely from a broad range of disciplines as we prepared the plan,” he says.

    Amiellen’s academic advisor, Bond University Teaching Fellow Baden U’Ren, says the team was selected to represent Bond at the JHEC largely due to their strong management team.

    “Above all else, it comes down to people. This particular team has a considerable corporate background, but they also have an entrepreneurial flair and an inherent knowledge of what makes a business tick,” says U’Ren.

    Step 4: Do your homework

    There are no two ways about it, winning a business plan competition requires a well-researched plan combined with a finely-tuned pitch. That means plenty of market research, to demonstrate a real need for the offering. It also means exposing the business plan and pitch to trusted advisors and mentors for feedback.

    CVSDude CEO Mark Bathie was negotiating unfamiliar territory when preparing his winning entry for Enterprize. So, he did his homework, with the support of technology incubator iLab, where the business is based.

    “We commissioned some market research with an iLab colleague, to identify the market, our competitors and where CVS Dude sits. Also at iLab, we have a mock board which meets every month or so to discuss any issues and this was great preparation for the competition. We’d already covered a lot of the same ground the judges were covering,” says Bathie.

    When it came to rehearsing the seven-minute presentation, Bathie left nothing to chance.

    “Peter Allison, the iLab Business Development Manager, helped me put together the speech and we went through lots of iterations. After that it was practice, practice, practice. I must have practiced over 100 times.”

    As well as market research for the product, Canagasooryam recommends researching the judging panel too.

    “Know your judges, their company and background, so you can anticipate what they’re going to ask. One will be involved in VC funding, there’ll be someone looking at new products, a marketing person, and so on,” she says.

    STEP 5: Focus on the value proposition

    “The fatal mistake is spending too much time talking about your technology and not enough time talking about the value proposition it presents to the marketplace, about the people who are going to use it. None of my investments failed because the technology didn’t work. They almost always fail because nobody wants to buy it. I want to hear enough about the technology to understand generally what it does, but who’s going to buy it? What’s it going to do for them? Why are they going to want to pay money for this thing? What is its core value proposition?” – Bob Christiansen.

    As a VC and Enterprize judge, Christiansen sees over 100 pitches a year and this is what he had to say on the focus of the business plan and pitch. We believe him. Enough said.

    STEP 6: Embrace the Q&A

    First-time business plan competition entrants are often apprehensive about the post-pitch question and answer time. This is a natural reaction, but those who have been through the mill tell a very different story.

    The Zipper Enterprises team-members were novices when their turn came at the Monash New Enterprise Challenge.

    “Going in, you’re really scared about how the judges are going to grill you. But, after the pitch, the judges sat with us for an hour and gave us feedback. We took in everything – that’s what you learn from,” says Canagasooryam.

    Two months later at the JHEC, the team had an entirely different approach to the dreaded Q&A.

    “We were more accepting of the questions and more ready to answer. We had gone through practice questions and decided who would answer what. You don’t want to stray, not accept their comments or snap back. Some of the other teams seemed too confident and a bit defensive,” she says.

    Fellow JHEC winners Amiellen were not only receptive to the judges’ questions, they used the Q&A as an opportunity to demonstrate their confidence.

    “It’s easy to become defensive when you’ve got an accountant, a VC or a lawyer throwing curly questions at you. But we were very receptive to questions and honest in our responses. We didn’t try to fluff anything up. We answered very directly but also in a way that encouraged the judges to dig a bit deeper, because we knew the business really well,” says Brimblecombe.

    STEP 7: Spend it before you win it

    One final point for putting together your business plan competition entry: communicate to the judges what you intend to do with the prize money.

    “If you’re talking to an investor, they’ll want to know what you plan to do with the money – that you’re not going to run off to the Bahamas with it. The money from Enterprize, while it is quite a lot of money, it’s not going to take you through serious growth, it’s usually earmarked for protecting intellectual property – getting the patents done, that sort of thing,” says Christiansen.

    The typical business plan competition winner is not ready for a large capital injection. According to Christiansen they’re still at seed stage, but (pay special attention here) usually within a year of getting a serious investment.

    So, here is the scenario: you have a start-up business in operation and you enter a business plan competition. You follow the previous seven steps to success and in doing so your plan is waved under the nose of several influential VCs. You use the winnings to help fund your next move. In the near future, you may go looking for some serious capital. Who do you call on?

    “I’m certainly keeping an eye on the CVSDude guys,” says Christiansen. “One of the very early winners was a product called Elvin, which has been re-badged into Mantara. I’ve invested in that company as recently as a few months ago. It now has a huge presence in the US and is a very successful electronic trading platform for hedge funds.”

    In business as in life, who you meet matters. As Woody Allen once said, “Eighty percent of success is showing up.”

    Aim for the blue sky
    When pitching to investors, or competition judges posing as investors, every management team must answer one particular question: how big could this business really be? As VC and member of the Enterprize judging panel, Bob Christiansen advises Australian start-ups to think bigger.

    Don’t make your business plan too conservative. Compared to the US, Australian business plans look like they’re written by an accountant applying to the bank for a line of credit – really conservative.

    That’s certainly not what I’m looking for.

    I want a business plan to show me the blue sky. How big could this business really be? Not that you’re necessarily going to make it that big, because we all know it requires investment, luck and other bits and pieces. But what are the structural impediments to this being a huge business? Is there something about its very nature that means it will never be more than a $2 million-a-year business? Or could it be a $100 million-a-year business in ten years, if the assumptions held true?

    That shows me you understand the model, you understand the parameters, and that, if you got the parameters right and put some capital into it, this could be a huge business. You’ve got to show investors that. They won’t hold it against you. It sounds strange, but it can be worse to have too conservative a business plan than one too optimistic

    Aussies take up Google’s global challenge

    Universities across Australia are signing up students to participate in the 2008 Google Online Marketing Challenge, testing their marketing know-how against the rest of the world.

    Participants design an online marketing strategy for a local SME using US$200 Google AdWords, free of charge. The strategy is implemented for a three-week period while students fine-tune their campaigns and Google collects stats to measure the campaign’s success.

    Deakin University Lecturer Chia Yao Lee has entered ten teams as part of his post-graduate eBusiness Strategies course and says students will benefit from the real-world experience.

    “With concepts such as AdWords, online marketing and CRM on the internet, sometimes it’s better for students to participate and experience any problems. Then they can apply what they learn in the course to solve the problems,” says Lee.

    Understanding the technology is only part of the story, according to Lee.

    “Students have to analyse the client’s requirements. What is the SME trying to achieve? Are they setting up a new website, do they have a new marketing campaign, are they reaching out to new customers, do they have a new product? These concepts are actually more important than just understanding how Google AdWords work.”

    For Malay Joshi, who runs a post-graduate Electronic Marketing subject at Victoria University, the Challenge presents a previously unavailable opportunity for students to validate their marketing strategies.

    “The students have learnt about concepts such as AdWords in the past and we’ve also dealt with real life businesses, but that was more for business analysis. We’d suggest a strategy and plan how they might execute it, but we never had the opportunity to execute it for them,” says Joshi.

    “Taking part in the challenge, the students see themselves as marketing consultants and they’re getting a new perspective. They’re excited it’s going to have a real impact on the businesses participating.”

    Winners receive a trip to Google HQ in Mountain View, California, with seven night’s accommodation in a 5-star hotel in San Francisco thrown in for good measure.