Many MBA programs have entrepreneurship classes that let students flesh out new business ideas, but school competitions can help turn those ideas into real companies.
These competitions support budding entrepreneurs in a number of ways. They push students to design revenue structures for soon-to-be companies, provide critical feedback and give winners prize money.
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For Andrea Sreshta, participating in her school's competition helped her and a business partner move their company forward.
Sreshta and Anna Stork founded LuminAID, a portable solar light ideal for outdoor recreation or humanitarian aid, not long before Sreshta started her MBA program at University of Chicago's Booth School of Business. They won the 2012 Social New Venture Challenge – in which students create for-profit or nonprofit companies that help meet a social need – and were awarded $25,000.
"It came at a very helpful time," Sreshta says, noting that there's a constant need for working capital when you have a product-based business.
Business school competitions often take place in the spring, allowing students to plan for them from the beginning of the school year. Professors at the school and business leaders from the larger community coach students as they pitch, design and execute businesses. Competing can take several weeks and require students to make it through several rounds before winning a prize.
Prospective students interested in entering competitions should keep the following questions in mind as they research programs that offer them.
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1. What can students do to prepare? Before starting business school, aspiring MBA candidates can take a few steps to get a jump-start on competitions.
Reviewing what students did previously in their school's competition is one way, says Sreshta. "Sort of looking at those businesses and potentially contacting people who participated the year before to find out more about their experience."
Prospective students can then try to get concrete examples of what is needed to participate, such as business plans, she says.
The time before business school can also be great for thinking of business ideas, says Jim Theroux, director of the Center for Entrepreneurship at the University of Massachusetts Isenberg School of Management. He suggests hopeful MBAs "get good quality business experience. Get to know the problems of an industry."
Once students think of a business idea after working in a specific sector, they'll then have a built-in network that can help them try out their product or lead to potential team members, he says.
Once in school, many programs offer competitions in collaboration with a class. At the Foster School of Business at the University of Washington, students have the option of taking a course prior to entering the school's startup-focused Business Plan Competition, open to any degree-seeking student in the state.
"It is a 10-week class that prepares you for launching your business," says Connie Bourassa-Shaw, director of the Buerk Center for Entrepreneurship at Foster. Students learn about marketing in a competitive environment, business plans and other topics.
Sreshta took a similar course at Booth, which she says distinguished the Social New Venture Challenge from other competitions she entered.
"The ones we'd done before weren't as continuous," she says. Unlike other competitions, the class allowed her to get real-time feedback from her professors and classmates. She formed a lasting connection with peers who contacted her a year later about other people she could connect with to help her business.
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2. When should students compete? In a traditional, two-year MBA program, students can usually compete their first year, second year or both years. Experts are divided on which option is best.
"We like first-year students," says Robert Gertner, a professor at Booth. Competing at this stage gives students more time to make an informed decision about if and how they'll move forward with their business while still in school.