Small business competition

Small businesses compete for big break
Contest offers exposure, networking opportunities
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20060622/BUSINESS/606220325/1003

By DWAYNE STEWARD
The News Journal
06/22/2006

Finishing second in the Business Plan
Competition in 2003 helped Crystal
Baynard-Norman's hair care and
body products take off.

The natural hair care and body products Crystal Baynard-Norman began selling five years ago under the All God's Children label was popular among friends but didn't take off in Delaware's retail market initially.

Until 2003, when she won second place in the Business Plan Competition for small businesses sponsored by the city of Wilmington's Micro Enterprise Program. She was awarded $1,000 and a plethora of business resources that led to a host of opportunities she never thought possible.

"I was able to make contacts that led to being able to showcase my products at an expo in Las Vegas and larger corporations have approached me about mass-production," Baynard-Norman, 50, of Wilmington, said.

The annual Business Plan Competition that helped Baynard-Norman further her dreams kicked off again earlier this month. It will be accepting applications until July 9.

The competition, now sponsored by the Micro Enterprise Program, city of Wilmington and the Mega BizFest Committee, awards a total of $15,000, up from $5,000 when Baynard-Norman participated, to finalists whose business plans pass through four rounds of critique. The money will be awarded at a ceremony at the annual Mega BizFest on October 18.

The competition began as a part of the city's Micro Loan Program, which offers seminars and resources to help small businesses refine their plans and begin selling their products or services.
Baynard-Norman went through the program and said it helped All God's Children become "more like a business."

"They teach you everything there is to know about business, from marketing to advertising to promotion," she said. After years of keeping the competition within the program, the directors decided to branch out to the state.

"The competition was created to help small business in Delaware get off their feet or make it to the next level," said Loraine Watson, competition coordinator and head of the Mega BizFest Committee. "It allows them to refine their business plans and approach, which makes their business more effective."

Increased exposure from the competition had a snowball effect on All God's Children. Baynard-Norman's products are now offered at Serene Quest in Kennett Square, Pa.. She has even launched a new line of products, TeaShea, a body cream that is made from shea butter and organic tea.

The competition hosts several workshops that revitalize and improve the business plans before they reach the judges, said Sher Valenzuela, co-founder of Grow USA, a business designed to help small businesses land government contracts.

"They really help to prepare you for the competition by providing you with the basics," Valenzuela said. "The competition forces you to focus your plan more so that you can actually enter the market and run the business."

Valenzuela, also co-founder of First State Manufacturing, an industrial upholstery provider, won the first place prize of $5,000 in last year's competition for her plan for Grow USA. Both her businesses have grown substantially, leading Valenzuela to put Grow USA up for sale.

"I am unable to run both," Valenzuela said. "First State Manufacturing has doubled its revenues each year since it started; now making it a $3.3 million company and Grow USA is starting to grow just as fast."

The judges table will mostly consist of representatives from financial institutions but will also include the president of the Micro Enterprise Program and representatives from the Micro Loan Program.

"Our main goal is to match the owners with financiers that will provide them with more funds after the competition so they can continue to further their business," Watson said.
Watson also said the business plan competition is just one way to help more small businesses receive the "seed money" they need to get off the ground.

"I don't think there is enough seed money available to small business," Watson said. "It's a lot harder for small businesses to get loans and if you have maxed out all your credit cards just to get started, the chances of getting another loan is nil."

"Seed money" can be good or bad, depending on the way it's allocated, said James O'Neill, Department of Economics director at the University of Delaware.

"In economics, incentives are critically important. However, if the recipient doesn't follow through, it can lead to a misallocation of resources," O'Neill said. "If the process of allocation is more political than analytical, then it can be a negative."

The competition has been broken down into four categories: emerging, existing, established, and youth businesses. Each applicant will receive an evaluation from the judges detailing their business plan's strengths and weaknesses. The judges also will decide the amount of the $15,000 each finalist will receive.

The money, however, isn't what did it for All God's Children or Grow USA, their owners said.
"Networking is what's important. Great things definitely come out of it," Baynard-Norman said.