Q: Why should I enter the competition?
A: This competition is aimed at simulating the real-world process of entrepreneurs creating a business plan to soliciting start-up funds from potential investors. By developing a business plan, presenting for a panel of business leaders, and fielding questions about your business, you not only get to apply what you learned in college, but you also obtain a better understanding of things that need to be considered when you are looking at starting your own business.
Q: Do we have to have a faculty advisor to enter the competition?
A: Yes, having a faculty advisor is required to enter. This is important because your advisor will be able to help you as you go through and create your business plan. Additionally, your advisor may be able to provide you with contacts or connections to other individuals that may be able to help you hone your business plan.
Q: Do all of my teammates have to be Business majors?
A: No. One of the goals of the competition is to encourage the development and commercialization of ideas and technologies being discovered in our universities. Sometimes, there is a large gap between technical fields (i.e. Engineering, Chemistry, Physics, etc.) and business. Having multi-disciplinary teams members can provide a variety of viewpoints and complementary skills to bridge the gap between technology and the marketplace and is highly encouraged.
Q: Do all of the members of the management team have to be students?
A: The management team outlined in the plan can contain the names of individuals (if any) who are not associated with the university. However, if the member of the management team is not a student, they will not be able to present during the respective state competition.
Q: Can a team with student members from different universities compete?
A: Yes, student members from different universities can compete on the same team. In essence, this competition is aimed at simulating the real-world process of entrepreneurs creating a business plan to soliciting start-up funds from potential investors. As an entrepreneur, the focus should be on ensuring that your team has in place a proper management team that is also interdisciplinary (see judging guidelines for more information), not on whether or not your team members are from the same college.
Q: How many people can I have on my team?
A: The official rules state that the group size cannot exceed 6 people. The management team outlined in the plan will contain the names of individuals (if any) who are not associated with the university. Presenting group members must be students who presented during the respective state competition. There will be no substitution of team members. Non-student members of the venture’s management team must not participate in any presentations, including the finals.
Q: Where do we go if we need help on our business plan?
A: In addition to asking your faculty advisor, you should take advantage of the plethora of resources that is readily available through the people that you know, your school, your local Small Business Development Center, your library, and the many resources you can find on the web. On this site, we have also created an Entrepreneur’s Toolkit, which include various virtual resources that may be helpful.
Q: What do you think about software that generates business plans for you?
A: Quality business plans are concise, tout products or services with some sustainable competitive advantage, have well thought out strategies, and have thoroughly developed financials, to name a few things. Although a business plan software can provide you with a general framework, it is less likely that this approach will help you create a plan that can catch the attention of the judges who will be evaluating your plan. For the most part, there are many templates that exist for business plans. These templates should provide you with a ‘good starting point,’ but it is highly recommended that when your team is writing the business plan, you illustrate the uniqueness, not only of your company, but also of your product or service.
Q: How long does it take to write a business plan?
A: Writing a business plan and creating a concept that can generate a reasonable profit does not happen overnight. In a classroom setting, teachers usually give the students a whole semester to write a business plan. Oftentimes, students will prepare at least a year in advance so they can more thoroughly develop their plan. For the most part, there is a positive correlation between the time spent developing a plan, and the quality of the plan.
Q: If I enter the competition, can someone take my concept? Should I include a Non-Disclosure Agreement?
A: The judges who will look at your concept are there solely to judge. Each state selects judges they feel have the best interest of the students in mind. We cannot guarantee that the judges will not talk about the concept. They will have to discuss this in order to judge the competition, but we can say that in most business plan competitions, this does not happen. Due to the nature of the competition, we will not ask judges, reviewers, sponsors, staff or the audience to agree to or sign non-disclosure statements for any participant.
Q: Who can fund my venture?
A: It depends on where you are at in the capital lifecycle. Sources of funding for your venture can range from friends, founders, family, business grants, bootstrapping, angel investor, up to venture capital. In the early stages of your venture, it is common to have friends, founders, and family invest early in the company, as their trust is more in the individual than the possibility of large returns. On the opposite end of the spectrum, venture capital is identified by institutional investors interested in investing between $2 to $5 million in exchange for equity in early and later stage businesses.
Q: How should our team dress for the presentation?
A: Remember that this is a business meeting, and your team should dress accordingly. Dressing in business attire is common for these presentations. Please note that it is neither necessary, nor recommended, that your team dress in uniform.
Q: Do we have to implement our plan?
A: The Donald W. Reynolds Governor’s Cup and subsequent Tri-State Award was created to provide students with the opportunity to create a business plan up to the solicitation of start-up funds from potential investors. The competition was also created to encourage the development and commercialization of ideas and technologies from within our universities. As student entrepreneurs go through the process of writing a business plan, they are not only documenting their proposed business concept, but they are also actively evaluating the concept. Once the student entrepreneur completes the creation of the plan, from the concept development, to the marketing surveys, to the evaluation of the financial statements, the entrepreneur should be able to determine whether or not they want to pursue their business plan. Though not required, the cash awards were created to provide student teams with monetary incentives to turn their concept into reality.
Q: Will we be taxed on the cash award?
A: The cash award will be reported to the Internal Revenue Service (IRS) on a W-9/W8BEN form. Be aware that, in general, prizes and awards are treated as taxable income to the recipient. For this reason, please ensure that the information you provide on the W-9/W8BEN form is for your permanent residence and not your temporary residence.
Q: What if we have other Questions?
A: AEAF welcomes your questions, suggestions, and comments on how we can improve the program to meet the needs of participating students and their faculty advisors. If you have any questions regarding the Tri-State Award, please contact AEAF at (501) 374-9247.