Prize Competition Business

How Much Money Can You Make off of a Prize Competition Business? 

Tuesday 05th Mar 2024 |

The number of Americans, particularly from Gen Z, who wish to pursue entrepreneurship continues to skyrocket. There are so many opportunities available that now’s the best time to set up your business. 

But with so many unique business ideas floating around, it’s hard to settle on one. Have you ever thought about starting a prize competition business? 

Competition Business

You may have overlooked this idea, but it’s a great way to earn a lucrative income. But how much can you make from a competition business? 

Here’s what you must know: 

Prize Competition Requires Compliance 

Before starting a raffle business, you’ll have to ensure you stay compliant. Otherwise, you’ll be spending money rather than earning it! 

You’ll have to check your state’s gambling laws to ensure your raffle business isn’t considered illegal gambling. The IRS may not, at times, tax contests and drawings as part of an organization. But if this is the sole purpose of your business, you’ll likely have to pay taxes. 

Failing to remain compliant will likely result in large fines. Make sure you handle compliance before you start your business. 

The best way to do this is to start a raffle website using a professional service that can help you stay compliant. 

What’s the Prize? 

A competition business is as valuable as the prizes that you offer. For example, let’s say you have to pay an entrance fee to partake in a raffle. 

Would you pay $10 if the prize was a book? Will you pay $100 if the prize is a smartphone? You’ll have to consider the quality of the prize to justify the ticket price. 

Expenses for Your Raffle Business 

Maximizing your profits also means reducing expenses for your raffle business. Let’s have a look at what expenses you’ll need to maintain this business. 

You’ll have to pay a minimal cost, in most states, to register your business. Afterward, you’ll have to pay a small yearly fee for your domain name. This shouldn’t cost more than $20. Hosting fees shouldn’t exceed $100-$150 per year. 

Competition Business

The biggest expenses are the prizes. It’s often a risk to buy the prizes and hope you’ll recover the cost. The best option is to acquire them for free. 

For example, let’s presume you have a local “mom and pop” grocery store. You can request them to give you a voucher or gift card to offer for your contests and drawings. 

This can promote their business and bring in new customers. This is the ideal approach until you have the funds to buy more expensive prizes. 

Start Your Prize Competition Business 

Now you know the advantages of a prize competition business and how to maximize your profits from it. 

You’ll have to make sure that your raffle business is compliant. This prevents you from having to pay fines. You can maximize your profits based on the type of prizes you offer. 

Another way to earn more is to cut costs. Consider acquiring prizes for free from local businesses first. Keep your website set-up costs as low as possible. 

Do you need even more business tips? Check out the other blog posts on our website! 

Fishing and Feasting with Paul Whitehouse and GetYourGuide