On   the road to publication, it's nice to have some folks cheering you   on--besides your friends and family. You may not win the contest, but   here's how to win no matter where you place.
Know the Benefits. Entering a writing contest can do several wonderful things for you:
~Help you meet a deadline.
~Force you to prepare for submitting to agents by following manuscript guidelines.
~Give you valuable feedback from publishing professionals.
~Develop your confidence in letting others read your work.
 Choose a Goal.   Is your mission to gain publicity? To get feedback? To interest an   agent? Or maybe you just want to force yourself to stretch your writing.   Some contests give a prompt, whether written or visual. You might   discover the seed of a novel you never would have thought of before. It   was through a writing contest prompt that I began my current novel.
Stretch Yourself.   If you write romance, don't limit yourself to the hundreds of   romance-oriented writing contests available. Try something in another   genre or format (like flash fiction, if you're a novelist, or write some   sci-fi if you like to write mysteries). Often contests outside your   comfort zone can help you uncover a previously unknown ability in a   certain genre. 
Uncover the Details.   If the contest has a fee, evaluate whether it's worthwhile for you.   Many organizations run contests to raise money through contest fees.   This is legitimate, but stop to evaluate your chances of winning, and   what you'll receive. 
Make Like a Professional.   It's never too early to learn to follow directions. Sure, a contest's   directions for entries may seem strange, but consider it your boot camp   to becoming a published writer. If you can't follow (seemingly) arcane   instructions now, what will you do when the twelve agents you plan on   submitting to each have their own do's and don'ts?
Don't Forget to Debrief.   After the contest is over, evaluate how it went. If you received score   sheets or judges critiques, spend some time reading through the   comments. If the opinions hurt, set it aside for awhile, or go over it   with a critique partner. 
If   you entered an online contest, like one hosted on a blog, you can  often  read the winning entries. Take the time to go over the stories  that  placed, and try to determine why they are different. Did they just   follow the guidelines better? Are there craft issues you can work on?   Think of it as just another learning experience that will hone your   skills as a writer.
How have contests helped your writing?