Some people dream of coming up with the “Big idea" in order to open a business. Others want to be their own boss so badly that entrepreneurship is about starting “Any” viable business. The approaches may be different, but inevitably they will have one thing in common—where does the seed money come from?
Fortunately, compared to a few years ago, loans are much more readily available in Michigan than they once were, especially from credit unions and local banking institutions. Venture capitalists have become increasingly interested in Michigan, though often they are looking for investment opportunities that extend well beyond a start-up idea. There’s always the source as old as time, mom and dad, friends, and family, for those fortunate enough to have willing collaborators.
Businesses like Techumseh Brewing Company have seen success taking advantage of Michigan’s relatively new crowdfunding law that enables entrepreneurs to give investors equity in their company in exchange for financial support, a concept which was illegal in Michigan until late in 2013. Companies like Ann Arbor-based Glyph and Detroit-based Floyd used a more traditional crowdsourcing platform like Kickstarter to bring their visions to life. With traditional platforms financial donors receive rewards for their varying levels of contribution. These success stories, while inspiring, are not necessarily the norm.
Communities are now taking on a different role to help support the entrepreneurs in whom they believe, by organizing contests, and Michigan is a hotbed for such activities, large and small. One of the greatest elements of these competitions is that nearly all of them require applicants to submit a business plan. That virtually forces would-be entrepreneurs to go through the process, and often drudgery, of creating such a plan, which should in fact be a fundamental element of starting any business. It’s absolutely critical to think through what makes your product or service special? Who, if anyone, is your competition, and how will you surpass them? How much will it cost to start and run the company? How will you market your business?
Another great byproduct of these competitions is that, while there is typically one true winner, most of the businesses that participate win in one way or another. Even if you don’t secure start-up dollars, the information, exposure, and experience gained through the process is invaluable. The communities offering the competitions often nurture multiple participants, despite the definitive outcome, so that eventually more than one of those businesses opens in their neighborhood.
Here are just a few of the many competitive opportunities available in Michigan
This is one of the longest running competitions in the state. To participate in the program individuals and teams must have a business concept that has high growth potential. This might be a new product design, e-commerce platform, life science application, advanced manufacturing breakthrough or another innovative idea. Competitions take place in both the spring and fall with awards ranging in value from $1,000-$25,000, and include opportunities for emerging companies as well as start-ups. www.gleq.org
Entering its 5th year, the Comerica Hatch Detroit Contest, presented by Opportunity Detroit, is an opportunity for one savvy entrepreneur to win a $50,000 grant to open their brick and mortar retail business in Detroit, Highland Park, or Hamtramck. www.hatchdetroit.com
This competition in Lansing is one of the smaller ones in terms of awards, but the environment is really helpful and encouraging for participating entrepreneurs. The simple concept is post, pitch, and win. You post your business idea on the website, and get votes. The top five vote-getters pitch their ideas to a live audience, and the winning idea receives $1,000 in seed money. Pitch sessions take place the last Thursday of every month, and are free and open to the public. www.thehatching.org
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