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Monday, October 16, 2017

Business Plan Competitions in Nigeria: Are they always worth the stress?

Many Nigerian entrepreneurs and business owners looking to raise either startup capital additional capital to fund their growth may have had cause to participate at a business plan competition in the past. Are business plan competitions really worth the trouble of submitting and participating fully in? We shall find out at the end of this article whether or not they are worth the stress.

What are Business Plan Competitions?
Let us begin first by asking what are business plan competitions? They are competitions designed usually by governments, international development agencies or consortium of investors to identify, mentor, and fund small and medium scale businesses which are viable and have great potentials for growth, employment creation and wealth creation. Usually they are part of a larger project by governments and major international organisations to achieve sustainable development goals or enable various countries achieve major economic and developmental aims. Therefore a business plan competition is both an economic and social development project.

Why Should Business Plan Competitions Matter to Entrepreneurs
There are a few reasons why you should participate in Business Plan Competitions. The main reason is that you could attract funding for your business if you win at the competition - that is not including the prize money by the way. Some business plan competitions like the Abuja Business Plan Competition offers prize money for the best 10 entries in addition to access for funding from high net worth individuals who may be interested in investing in SMEs with huge growth potentials.

Another benefit is the chance to network and meet potential business partners and customers. Like a trade fair which is principally a networking and marketing event, you could say a business plan competition also offers entrepreneurs new business opportunities that they may not have heard of but for the business plan competition.

Entrepreneurs can also be mentored through trainings, courses, conferences, case studies, lectures, affiliations with established business schools and institutions to mention a few entrepreneurs can actually be empowered with new skills, knowledge, information and strategies that could take their businesses to the next level.

Why Business Plan Competitions may be a waste of time
The other end of the divide presents the failure of the human factor in most noble projects. On one hand, business plan competitions are designed for entrepreneurs but they may not function that way. The organisers usually have interests and goals to achieve which may not correspond with the expectations and interests of the applicants at the competitions. Some entrepreneurs understand their businesses thoroughly but the competition organisers may hire ‘experts’ to review their applications and many of these so called ‘experts’ are questionably qualified to assess the viability and potentials or otherwise of emerging new businesses.

Most startup businesses which attracted huge funding for their businesses never applied to a business plan competition, because there are other alternatives which show greater promise. So someone like Mark Zukerburg who didn’t get the funding he required for facebook from a business plan competition may be right to ask “why bother then?”

Stiff competition and limited funding also reduce the chances of serious entrepreneurs with bankable business plans and viable businesses as well who may have to struggle to convince a panel of judges that they and not others should be considered.

There is also the issue of the integrity and competence of the competitions’ managers. YOUWIN for instance has faced allegations of favoritism, nepotism, lack of due diligence and lack of due process in the award of grants. Many grant winners have folded up their businesses due to inexperience, poor management, an unviable business model or other risks that were not factored in when these businesses were being assessed for viability and suitability for grant.

Business Plan Competitions in Nigeria: past, present and the Future
There will always be business plan competitions available to Nigeians whether they are perennial – once every 3 years – like the Abuja Business Plan Competition or annual like the YOUWIN, African Young Entrepreneurs Empowerment Nigeria, Tony Elumelu Entrepreneurship Programme or one off like the Pat Utomi @ 60 Business Plan competition, they have come to stay albeit for an uncertain period. Some other global and regional international business plan competitions hold in various parts of the world and Nigerian entrepreneurs can seize advantage to be part of it.

My Take on Business Plan Competitions
If you are new, young, inexperienced but have a business you believe so much in, then go ahead and participate in a business plan competition. This is because even if you don’t get funded, there are other benefits you can gain from them. If on the other hand you have lots of experience, you have an existing SME with strong growth and profit potentials and you have made concrete progress in growing your business with the little resources you have, then look for alternative sources as they are usually more promising, that is not to say business plan competitions are only for novices, but serious investors with interests in SME ventures are often nowhere near business plan competitions and they are not likely to fund startups run by inexperienced entrepreneurs.

Are you looking to submit a bankable business plan to an investor, bank or business plan competition and need very sound and reliable write up? Give me a call: 0803 206 4106 or email me: paulonwueme@gmail.com