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Fueling: Contests were crucial for some continued from PAGE 11

“When I found out about the business plan competition, I thought there is no better time than now,” Ms. Gargiulo said. Business plan judges must have felt the same. Last fall, Ms. Gargiulo learned she was one of the competition’s two winners. Today, clients are pouring into her Honeycomb Salon, although an official opening still is being planned. The Gordon Square competition is one of the newer business plan contests in Northeast Ohio and part of a growing crop of competitions focused on bringing businesses to specific neighborhoods. While business plan competitions are not new, the idea has picked up steam in recent years alongside a growing emphasis on entrepreneurism — both inside and outside of academia — according to Jerry Frantz, managing venture partner at

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JumpStart Inc., a Cleveland-based nonprofit focused on entrepreneurs. Often, Mr. Frantz said, contests awarding cash or other prizes to promising business ideas are an outgrowth of entrepreneurial programs, whether they be at universities, private corporations, nonprofits or community development organizations. As the popularity of such programs has swelled, so too has the number of competitions.

experience is invaluable, Mr. Frantz said. What’s more, unlike pitching a business to Uncle John or a rushed angel investor, competitors in these structured contests get vital feedback and guidance from judging panels that often include proven entrepreneurs, bankers, attorneys, investors and experts in product development and marketing. Everybody walks away with something, he said.

Pitching practice

Creating winners

JumpStart held its inaugural student business competition late last year, awarding the $1,500 firstplace prize to Miach Medical Innovations, a medical device company established by a Case Western Reserve University student. The Council of Smaller Enterprises revived and reinvented its business plan competition in 2011 after a 10-year hiatus. The contest came back as a business pitch competition, mimicking the popular TV reality show “Shark Tank,” according to Randy Carpenter, senior director of corporate communications for COSE. “We thought the mood was right to bring it back,” Mr. Carpenter said. Along with the economic downturn that put many displaced workers in a position to think about setting out on their own, he said, “things like Shark Tank on TV were bringing attention to the need to help early stage companies find funding and find the kind of expertise to support them.” In each of the last two years, the business pitch competition has awarded $40,000 to the top four winners, most recently crowning Kevin Suttman of Seven Brothers Distilling Co. in LeRoy Township as top prize winner. Other regional contests include LaunchTown and idealabs — both focused on college-student entrepreneurs — and TiE Quest, the business plan competition of TiE Ohio, part of the network of The International Entrepreneurs. The LaunchTown Entrepreneurship Award is an annual contest backed by Hudson’s Burton D. Morgan Foundation, and idealabs is a regional competition sponsored by the Entrepreneurship Education Consortium based in Ashland. All entail a cash award, but the bigger prize is being a part of the process, Mr. Frantz said. “Most business plan competitions provide some support along the way rather than just being judged competitions,” he said. Take delivering a business pitch, a necessary skill that might not come naturally to a would-be entrepreneur. Introducing the business concept in front of judges is a staple for business plan competitions and the

Mike Stanek, president of Cleveland Cycle Tours, agrees with that notion. Mr. Stanek was a runner-up in COSE’s 2012 business pitch event. Sure, the $5,000 prize is great. The money will be used to buy a power-assist device for its “group cycling” tour bike and for marketing the nascent company. More valuable, however, was the comments and suggestions received as he advanced in the competition. “It forced us to hone our business plan further,” Mr. Stanek said. “The feedback we got really made us think methodically about how to move the business forward and even got us thinking along some different lines.” Guidance and technical assistance for promising small business owners are also key assets of community-based competitions like the one in the Gordon Square Arts District last year, said Nick Fedor, economic development director for the Detroit Shoreway Community Development Organization, which held the competition. Along with free rent, the Gordon Square winners got access to more than $5,000 in grants for build-out and startup costs. The competition was backed by the Charter One Foundation as part of its “Growing Communities” initiative, which has bankrolled similar competitions for storefront openings in Cleveland’s St. Clair Superior neighborhood and Akron’s University Park neighborhood. Its newest contest is aimed at boosting occupancy rates in the 5th Street Arcades, with grants ranging from $1,500 to $20,000. Carrie Carpenter, senior vice president for Charter One, said more community business plan competitions are expected in Northeast Ohio and beyond building on the successes locally. While some might argue it is more telling for entrepreneurs to stand up to real-life market forces (without the advantage of cash prizes or free rent), Ms. Carpenter said business plan competitions are effective at weeding out good ideas and helping entrepreneurs plug holes in their business plans before there is much at stake. “All five entrepreneurs that won the Charter One grants in the (2011) Ohio City contest are still in business two years later,” she said. “I think that is pretty telling.” ■


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Crain's Cleveland Business  

March 11 -17, 2013 issue

Crain's Cleveland Business  

March 11 -17, 2013 issue