Are Business Awards a Scam? What Small Businesses Should Know Before Applying

If you've ever been tempted to apply for a shiny “Best in Industry” or “Top Agency of the Year” award, you're not alone.

Awards can be powerful credibility boosters — used on websites, social media, and email signatures to help businesses stand out. But here's the uncomfortable truth most people won’t tell you: many of these awards are pay-to-play.

Through a network of industry connections (some of whom have personally known or worked with past award judges), I’ve learned a behind-the-scenes truth: a surprising number of business awards are not entirely merit-based. 

Especially the national ones. Some local awards may be more authentic, as they're often based on community votes or open nominations. But the big-name industry awards? Many are glorified moneymakers for the organizers.

Here’s how it usually works:

You submit your application — often spending hundreds of dollars in entry fees. If your submission is compelling enough, congratulations, you may be named a finalist.

But to actually win? You’ll need to sponsor the event.

That’s right — your victory might hinge not on your innovation, results, or leadership, but on how much money you’re willing to spend on sponsorship packages. We’re talking thousands of dollars.

This isn’t conspiracy theory territory — it’s confirmed by people who’ve been on the inside. To be clear, not every award operates this way. But enough do that it's worth a serious gut check before you start investing your time and money.

So the question is: Is it worth it?

If you're a small business or growing agency, probably not. While being an “award-winning” company might impress a handful of prospective clients, most customers care more about your actual results than your trophy shelf. They want to know: Can you do the job? Can you deliver what you promise?

Now, if you’re aiming to impress investors, get featured in press releases, or bolster your SEO through backlinks (many award sites link back to winners), there may be some strategic value in applying. But if you’re doing it just for the vanity or to hope you win on merit alone—know the game is often rigged.

Here’s a better use of your time and money:

• Invest in customer experience and service. Let your reviews be your “awards.”

• Build real case studies and testimonials.

• Focus on local community engagement and recognition—which often has a more genuine impact.

Ultimately it's your call if you want an expensive badge to bring your business a hint more credibility. But as a small business owner myself, I would always recommend and advise fellow small business owners to invest their time and money where there will be the greatest ROI first and foremost.