Business plan first step to successful entrepreneurship

COURTESY KLR
OPPORTUNITY KNOCKS: Larry Davidson, co-chairman of the Rhode Island Business Plan Competition, says that right now is a good time for startups because the unemployment rate is up and number of jobs available to well-qualified people seems to be down.
COURTESY KLR OPPORTUNITY KNOCKS: Larry Davidson, co-chairman of the Rhode Island Business Plan Competition, says that right now is a good time for startups because the unemployment rate is up and number of jobs available to well-qualified people seems to be down.

During his three years as co-chairman of the Rhode Island Business Plan Competition, Larry Davidson of Kahn, Litwin, Renza & Co. Ltd., in Providence, has watched the annual contest grow in size, popularity and prize money. In 2011, the competition attracted 103 applicants, nearly double the 2009 total, and awarded a record $250,000 in cash and in-kind prizes. Business- plan donors and corporate partners have spoken about trying to make the competition the largest of its kind in the nation and a catalyst for growing the fledgling knowledge economy in Rhode Island.
Davidson speaks about the direction of the competition and its role nurturing the next generation of Rhode Island entrepreneurs.

PBN: The top cash prize this year is $40,000, down from $50,000 last year. Why is that and is there any concern it will mean less interest?
DAVIDSON: We have had a tremendous response from our partners, but it has been a tough year. Two years ago we said we wanted to get bigger and become more relevant with our prizes. We did that. Whether we would become one of the biggest in the country or not was more of a stretch goal put forth from some of our fundraising people. … They set a goal that was not entirely realistic. So we continue to have stretch goals and push to make it as large as we can.

PBN: Last year saw a record number of applicants. What are the expectations this year?
DAVIDSON: I am expecting we should have a similar kind of result. For a number of years the Business Plan Competition would get between 60 and 70 applications every year. Because of its heightened awareness, last year we had 104 applications. I would expect we would be somewhere near there, but you never know. It is a function of the Business Plan Competition and the general economy. The economy appears to me to be ripe for business startups. PBN: What do you see that makes it a good time for startups?
DAVIDSON: We see that the unemployment rate is up and number of jobs available to well-qualified people seems to be down. When that happens people are more interested in seeing if they can fulfill a lifetime dream of having their own business. Rhode Island has also created a number of conditions that make it easier to get started. We get a lot of encouragement from Rhode Island Economic Development Corp. [and] help from the Rhode Island Center for Innovation and Entrepreneurship.
PBN: In addition to the business-plan competition itself, you have the Elevator Pitch Competition, different tracks within the competition and seminars. What role do those different offshoots of the main competition play in achieving your mission?
DAVIDSON: The overall mission is creating an environment where business can get started. And so the competition itself very much focuses on the 100 or so applications we are going to get and ultimately on the eight or nine finalists who will receive prizes.
But we don’t view our role as limited to that and we want to encourage as many business startups as possible. There are people who are not really suited for the competition or ready for the competition or inclined to want to be part of that, but they still benefit from other aspects. We run a series of seminars on financial forecasting, on business-plan writing, on making presentations to potential investors.

PBN: In its history, the Business Plan Competition has helped a lot of technology companies. Is that a focus for you?
DAVIDSON: We do not focus on any particular industry. In fact we have probably announced as many winners that would be closer to the retail sector, some technology-based and some product-based. Our one leaning is scalability. Winners of the business-plan competition generally have to have the ability to scale up to be a substantially sized business, one that will require capital from outsiders to scale up and who will have a bigger economic impact on Rhode Island than a mom-and-pop kind of a business. We are interested in having ideas germinate into relatively high-scaled businesses. PBN: What happened to the separate track for environmental companies?
DAVIDSON: Historically we have developed something called a green track, which was funded by a special group from EDC looking to invest in green companies. We continued that even after the funding source dried up and we continued that for several years. Our winner last year was in the environmental-services business – that came out from the green track. We have decided to discontinue the green track only because it forced us to cut some good companies out and move some companies that might not otherwise have qualified into the finalist category.

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PBN: What’s in the competition for entrants who don’t win?
DAVIDSON: We will have 100 companies participate in the actual application process. So we have already seen more than that in companies that come to our seminars and come to the Elevator Pitch Competition. All of those folks have benefited by the education associated with the Business Plan Competition.
The 100-or-so folks who decide to put in an application will have put themselves through a process that requires them to think through what is in their future business that makes it unique. … Many participants have come up to me after the competition and said they really benefited by putting their ideas and thoughts together in a cogent way and therefore have a better plan for how they are going to go forward. •

INTERVIEW
Larry Davidson
POSITION: Principal with Kahn, Litwin, Renza & Co. Ltd., certified public accountants and co-chairman of the Rhode Island Business Plan Competition
BACKGROUND: Davidson has 35 years of experience as an accountant, both at KLR and before that Ernst & Young. After the Business Plan Competition started in 2000, Davidson became a judge in 2006 and three years ago he was named co-chairman of the contest.
EDUCATION: Bachelor’s in business administration from the University of Massachusetts, 1968; master’s in finance from Babson College, 1974
FIRST JOB: Assistant in a kosher butcher shop
RESIDENCE: Natick, Mass., and Providence
AGE: 65

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