Starting a competition business looks straightforward on the surface. A good prize, a website and a way for people to enter feels like enough. In reality, the industry has very clear expectations around trust, compliance, payments and user experience. When these aren’t handled properly from day one, even the strongest prize can struggle to gain traction.
Below are the most common mistakes new competition businesses make, along with simple ways to avoid them.
1. Launching Without Proper Legal Structure or Compliance
One of the fastest ways to lose credibility is failing to meet basic UK competition requirements. Missing free entry routes, unclear skill questions, vague terms or poor GDPR handling quickly raise red flags for customers and payment providers.
How to avoid it:
Ensure your website includes compliant Terms and Conditions, a free entry route, a suitable skill-based question, privacy policy, cookie policy and any other documentation the industry expects. A clear compliance framework increases trust and helps avoid payment gateway issues later.
2. Using the Wrong Payment Gateway
Many new operators assume that mainstream processors like Stripe or PayPal will approve competition sites. Most of the time they won’t, and accounts get shut down mid-launch, freezing funds and disrupting everything.
How to avoid it:
Apply through merchant providers that actively accept high risk industries or competition businesses. Cashflows is one of the most reliable options in the sector and offers the stability needed for prize draw operators. As Cashflows partners, we can introduce you directly to people who understand the industry and know exactly what is required for approval. A stable gateway protects your business, your customers, and prevents downtime during key sales periods.
3. Offering a Great Prize but a Poor Website Experience
Customers won’t purchase entries if the site feels slow, confusing or untrustworthy. Missing ticket counters, unclear pricing or a clunky checkout flow all reduce conversion rates.
How to avoid it:
Build the site in a platform designed for competition businesses. Use countdown timers, live ticket progress, clear pricing, mobile-friendly layouts and simple entry flows. A professional site increases confidence and drives repeat entries.
4. Assuming Sales Will Come Without Marketing
Many new operators underestimate the budget and consistency needed to grow. Relying solely on organic reach or hoping a prize will “go viral” rarely produces results.
How to avoid it:
Plan marketing before launch. Use Meta ads, influencers, email marketing and retargeting. Build a pre-launch interest list, then use paid campaigns to scale. Even a modest, well-managed spend can fill competitions quickly.
5. Running Before the Business Is Ready
Launching with multiple competitions, unclear financials or no plan for support creates avoidable problems. It’s better to launch one strong, well-structured draw than several weak ones.
How to avoid it:
Start with a single competition. Perfect the system, understand your customers and scale from there. This approach reduces costs and builds a stronger foundation for growth.
Final Thoughts
Successful competition businesses focus on compliance, trust and user experience before anything else. When you avoid the common mistakes above, your prize, your marketing and your brand have a far better chance of scaling.
