Award Programs: Alternative Sources of Financing
By CO Staff @canadaone | November 30, -0001
We are putting together a database that will list current award programs in Canada that will be going up in the new Access-2-Capital workshop. If your organization offers an award program, please email us your info.
What do you do when you need additional cash to start or grow your business?
Many entrepreneurs automatically turn to the banks. But this may not be the best - or even a viable - financing solution. Fortunately, alternative sources of financing do exist, with awards programs being one example.
Award programs are competitions for entrepreneurs and business owners. Many contests have a particular focus, whether that happens to be looking for the best business plan, retailer, or Canadian entrepreneur.
Winning an award contest can have a variety of benefits. Quite often winners will receive free publicity, and the award often adds to the credibility of the winning entrepreneur/business. Some awards, such as the Entrepreneur of the Year Award, have a great deal of prestige associated with them. Also, many award programs also include a cash prize that may range from a few thousand dollars up to $50,000 or more.
A key advantage of the cash prize from an award program is that the money is awarded with no strings or payback requirements attached to it.
Take the Business Plan Competition for Young Entrepreneurs, run by Students in Free Enterprise (SIFE) Canada as one example.
Young entrepreneurs were encouraged to submit their business plans to the SIFE competition. Through a judging process eight category winners were selected, and participants from each team were invited to Ottawa, with transportation and accommodation expenses fully paid, to compete in the final phase of the competition. After an oral presentation to a panel of judges, the overall winner was chosen.
What did the participants of the SIFE competition receive for their success? Each participant received some publicity in Ottawa's newspaper, The Ottawa Citizen, a cash prize of $500, and a software bundle valued at $500. The overall winner in the competition, Biz-Zone Internet Group, received an additional $3000 cash prize, $3000 grant, and an extensive mentoring program.
How can you find out about upcoming award programs? Kim Mortson, a small business consultant, offers the following tips:
- scan periodical (magazines targeted towards small business, business sections of the newspaper)
- contact professional associations (e.g. Eureka)
- keep your ear to the ground
- websites (e.g. Strategis and CanadaOne)
- trade associations
- some educational institutions will have this information
When looking to an award program as a source of funding, you'll need to weigh the odds of winning against the time needed to enter the contest. Nonetheless, award programs can be an excellent source of capital for Canadian business owners.