Biz plan contest in need of polishing

Region’s annual entrepreneurship contest has a solid base. Now it’s time to start growing the economy.

Like a miner heading into the wilderness in hopes of unearthing a small, buried fortune that no one else has discovered, business plan competitions are typically intended to be an exercise in prospecting for those fresh new ideas which have the potential to grow in value quickly, add jobs, and create economic wealth in the region.

But that’s not the intent of the Northeast Wisconsin Business Plan Competition, nor has it been the result in the five years since the inaugural class of winners were selected in 2006.

Of the 14 business plans recognized and awarded a total of $64,000 in cash prizes during the first three years of the competition from 2006 to 2008, only four companies remain in business with regular operations. Of those four, three companies actually made investments and increased the number of jobs in their operations since being recognized in the competition.

Those three – Neenah-based Stellar Blue Web Design, Carmel Crisp & Café of Oshkosh and green3 LCC of Oshkosh – all represent some of the attributes that constitute the kind of payload business plan competitions are typically intended to mine. Stellar Blue has grown from three to six employees, and acquired two other firms since it won 5th place and $2,000 back in 2007. Carmel Crisp went from start-up to 10 employees and has become a bustling coffee shop, confectionary and gift retailer since winning 5th place and $2,000 in the 2008 competition. Lastly, green3, a specialty apparel manufacturer and wholesale/catalog retailer, increased from two to 13 employees since capturing one of the finalist honors and a $2,000 prize back in the inaugural 2006 competition.

With a good deal of money and potential prestige at stake, the low rate of success picking winners over the years in the regional competition has left other business plan entries – a number who continue to have thriving businesses long after their entries were shunned – asking what exactly is being evaluated, and what isn’t being considered.

Judges for the competition say they have a narrow, highly-defined range of criteria from which to evaluate the business plans they’re comparing against one another. There’s no judgment of character of the entrepreneur, or even any subjective consideration to whether such a business could actually make it in this market – at least not until the round of five finalists make an in-person presentation in front of a panel of judges at the very end.

There’s no financial background evaluation, and there’s no criminal background check of the individuals submitting business plan entries. Both of those criteria are used in other business plan competitions, and potentially would have filtered out some of the past winners by indicating past histories of poor business management. Following the competition, there’s no accountability of how prize money is spent, even if the business plan writer never takes any further steps to actually get the business off the ground.

But these and other potentially distinguishing criteria aren’t considered at this point, primarily because the competition is simply intended to encourage residents of northeast Wisconsin to write business plans, not to actually enhance the economy of the region.

As a result, the regional competition hasn’t even captured many of the business plans from the area that have advanced to higher levels of the Governor’s Business Plan Competition in recent years.

Don’t get me wrong – the business plan competition is an outstanding practice for unearthing the region’s next green3 or next Liveyearbook, the Neenah-based firm which went on to become northeast Wisconsin’s first winner of the Governor’s Business Plan Competition in 2010. It should be an exceptional vehicle for identifying ripe opportunities for venture capital investors who want to support entrepreneurship in the area. But the Northeast Wisconsin Business Plan Competition needs to be polished up a bit to achieve that kind of success, and that means modifying its current format.

The Governor’s Business Plan Competition is a good place to start. By replicating more of the format and more of the evaluation criteria from effort, our regional business plan competition can be better positioned to genuinely attract investment, create jobs and grow wealth in the New North.