Well, yes and no.
What if I don't win the contest? Does that mean my writing isn't any good? Does it mean I should give up? Does it mean I'll never get published?
Ummm, don't take it so seriously.
There are up sides and down sides to contests and my advice is to consider carefully before entering. There are a lot of writing contests out there and I do mean a LOT. If you throw a search into google for writing contests you'll come up with page after page of listings that mention writing contests of one type or another. And there are writer's magazines and organizations that tell you about contests all the time. But you probably already know that.
Here's the thing though. What do you expect to get out of a contest? Think about it before you enter. Odds are you're going to plunk down some bucks as an entry fee and as a writer with a lot of contests out there, how many do you think you want to enter? How much money do you want to gamble on a win? And remember there are human beings running these writing contests. A lot of the time a winner may well come down to the taste of the judge or the mood her or she is in that day (assuming the book is not a jumbled mess of spelling, grammatical and other errors). Funny, that can also be a determining factor on whether or not an editor accepts some writing you've submitted.
Okay, okay, I have entered contests in my time. I've won a couple and place highly in a couple others (one of which was the Nicholl Fellowship for Screenwriting in which I made it through the Quarter Finals - where there is a very high return for the person awarded the top position). And since they're a Fellowship and continue every year helping screenwriters get started, I'm comfortable with where the entry money goes there. Additionally their top prize was $30,000 at the time (plus exposure) which is nothing to sneeze at.
But, what I'm saying, is think about it. If contests are your thing, enter the ones that mean the most to you. Whether it's a large monetary prize, publication, exposure, or all of the above and more. Give it due consideration.
Well, here's one thought. Let's say you enter a writer's contest with a $25 entry fee which is common these days. Now, let's assume about 3,000 people enter that contest. and it has a top prize of $2,500 (which is high). Well, you do the math. The contest sponsor has just collected $75,000 in entry fees and is paying out $2,500 or perhaps a bit more if there is a second and third place. Yes, there are costs for administration, depending of course upon who's offering the contest. But, really, is there a profit here? I mean if it's a publishing house offering the contest and perhaps publication as part of the prize what are they doing, subsidizing publication of the winner's book with the fees they collect from everyone else? I mean they have readers at a publishing house. I puzzle over that.
Then there are the contests sponsored by large corporate entities (I can't name names, but I think you can figure it out). They're charging entry fees to writers why? If their background is promoting writing as a career and they sell books and magazines and more aimed at that, what is the reason for an entry fee, if there is one?
The point is, I've seen many places offering writing contests with entry fees that vary anywhere from about $5.00 (a very low entry fee) to near $100.00. This can get very expensive for a struggling writer just beginning, so pick and choose wisely. Do the math, wonder about the fees. It'll do you good.
On the other hand, isn't getting your writing polished to perfection, ready to show the world when you might enter a contest about the right time to maybe be submitting your work to publishers of various types? Perhaps you want to go "Indie" and do it on your own. Wouldn't either be as satisfying as winning a contest?
If writing contests make you hesitate perhaps submission and rejection would be a better route for you to take. It's a bit like a contest anyway. You submit and you win or your lose. But, if submitting, you submit again, perhaps do some rewrite and submit again. And it doesn't cost you an entry fee each time you do. And, rejection is part of the process.
I'm not saying you shouldn't enter contests, but I am saying you need to consider before you jump. You don't know what makes a writing contest winner any more than you would know exactly what an editor is looking for in the next novel or article he or she is going to accept.