This story was originally published on Boston.com’s Small Business Blog.
Have you ever met someone that’s actually won a small business contest?
Believe it or not, they do exist. With a flood of contests aimed at small businesses launching in the past few years, you’ve likely heard of at least a few of them. Contests can ask small businesses to do all kinds of things in order to win: enter a full business plan, create a video talking about a business or get the most votes in social media. Some require a lot of work, others are relatively simple and the prizes can vary in both size and impact.
Many big businesses like Intuit and American Express have given away $25,000 or more, while others give away things like iPads, marketing makeovers, tutoring from experts, advertising exposure and even placement on Wal-Mart’s shelves.
But as a small business owner is the time spent having to enter, as well as the promotion of your entry ultimately worth it? The answer is both yes and no, depending on who you ask. Much like playing the lottery, you only walk away truly happy when you win. If not, it’s a waste of time and money. One thing is for sure though, the allure of the big prize keeps many coming back. With small business owners sometimes desperate for capital and exposure in order to make their ventures a success, they’ll try anything once.
Cynthia Rosenfeld, the owner of Main Street Media Group – a marketing consulting firm based in Hingham, MA – recently entered into the Amex Big Break contest, despite being in business for just three months. Winners get a $20,000 cash prize, free one-on-one consulting about their current use of Facebook and a two-day advertising and marketing boot camp at Facebook’s headquarters in Palo Alto, CA. The entry process has since closed.
“Since we have been in business such a short time, we believe that winning this grant could catapult us to the next level in terms of growing our client base and then expanding our company,” said Rosenfeld. “It is absolutely worth our time to take a shot at this. I think we would feel that we let ourselves down if we didn’t go for it.”
In talking to many small businesses about their motivation, different answers surfaced outside of the monetary payoff. Many cited the exposure that is offered for being selected one of the winners as the driving force, while others want the experience of being forced to define what their business is. Hitching their wagons to a big company with marketing dollars to promote them was also seen as a huge payoff.
“I have partaken in the Amex Big Break contest and last year I was chosen as semi-finalist,” said Michael Podlesny, the owner of Mike the Gardener Enterprises, which operates in Burlington, New Jersey. “While the financial reward would be great, I was looking to get the exposure out of it. As a small business with a limited marketing budget you could imagine what winning would have done for us.”
Some just want validation for what they’re doing and in running their own business. “There’s a certain allure to small business contests,” explained Jill Nalorik, who owns a boutique marketing firm in New York. “As an entrepreneur, I’m always looking for an opportunity for my business to gain a bit of publicity. In addition, and perhaps more of a driving force is the fact that I spend literally 99% of my day thinking about my business. Winning one of these contests sort of validates all that hard work.”
Then of course, there are the lucky ones who actually win these contests. For these small business owners, it was clearly worth the time and effort invested. Matthew Griffin, the President and CEO of Baker’s Edge – which manufactures and sells baking pans that allow for more food with “edges” like brownies and lasagna – parlayed his winnings into a hugely successful venture. Griffin won the Ideas Happen contest, sponsored by Visa and Microsoft, that landed him a $25,000 grant to start the business. While Griffin admitted it was a somewhat long and drawn out entry/voting process, it paid off in a big way.
“I used the 25K to secure tooling and equipment for production,” Griffin said. “I also utilized that exposure and seed money to help convince a local bank into giving me a business line of credit – that was necessary to cover the rest of my start-up costs (an additional 40K).” Baker’s Edge now generates more than $1 million in sales per year.
So when deciding whether or not to take the plunge, what are the things to consider, how should a small business “vet” the awards and determine whether or not the payoff is worth the work?
“Really evaluate the risk in time and goodwill of fans compared to the benefit the contest gives, then allocate resources accordingly,” said Amy Baxter, the CEO MMJ Labs which produces products designed to make getting shots easier for kids. She has entered several contests, including Chases’s Mission Small Business, and found them to be beneficial. “Everything you say “yes” to is something else you have to say no to, so think of the opportunity cost in lost time when you enter a contest that requires soliciting votes.”
“Any “contest” that can increase exposure, or has cash or equipment and that has a set of judging criteria based on merit or business standing, interests me,” continued Griffin. “Any contest that is a blind choice or has too many “random” elements does not. I think if you can win based upon merit it helps craft a very strong public relations story (which is a bonus to the win). Randomly winning things from the draw of a hat is too much of a longshot – and I don’t play the lottery!”
Has your small businesses entered and won any contests? What was the payoff, or did you not find it to be worth it? Weigh in below.