I see this question asked a lot on e-mail groups. There is no complete right or wrong answer, since it depends on the person, the type of writing, the contest, and much more. If it’s a contest that a publisher is running, the first thing to ask yourself is if that publisher is one you’d like to publish your book with.
If the answer is no, you need ask nothing else. Don't enter.
If the answer is yes, then see if the publisher is charging an entry fee. Big publishers usually don’t. If it’s a small or new publisher and they are charging an entry fee, then give it a second thought, since they might be holding the contest only to raise money, or even to bring in writers and then charge them for publishing. There are sharks in them there waters, people, so be careful. (Smile)
RWA contests. These always charge fees, but there are good reasons to enter one. Many have published judges or experienced judges. That means for a small fee you can get some feedback from strangers about your writing. Even if the judges aren’t that experienced, they are still romance readers and they know what they like and what they don’t. They might not be able to explain as well why chapter three works for them when chapter two put them to sleep, but they can let you know there is a problem. And since they don’t know who you are, and you don’t know who they are, there’s much more freedom for them to tell it like it is. Family and friends often won’t.
The biggest reason I think there is to enter an RWA contest, or any contest, would be for the hopes of reaching the final judge. Of course that judge should be a top agent or top editor that you really want to reach. Winning or finaling in a contest is also good fuel to add to any query letter. It tells an agent or editor that your writing was good enough to get you that far.
And that ain’t chicken scratch. (Smile)
Do note that just because a manuscript doesn’t do well in a contest doesn’t mean it’s hopeless. There are bad judges out there, and there are great stories that just aren’t formatted to do well in a romance writing contest. Like say, if your hero and heroine don’t even meet in those judged pages. Or the story is more single title than romance. Or maybe it’s not romance at all. Or maybe your hero is a jerk for the first fifty pages -- which could be dangerous even if you are sending to agents and publishers. We do like to like the characters we read about in a romance, at least the ones that we are supposed to cheer for.
See, told you there was no complete right or wrong. You’ll have to look at where you are in your writing, how quick does your story hook the reader -- which really should always be quick if you ask me -- is your story romance, can you afford to enter the contest, do you want to reach that publisher, editor or agent that will be doing the final round of judging, and many other questions.
In the end, you are the only one who will be able to decide if entering a certain contest, a number of them, or none at all, is in your best interest as a writer.