Ordinarily, this would count as organizational expenses for starting a business. You would deduct them after you have started the business - you can subtract up to $5,000 in organizational expenses and $5,000 in starting expenses, but only after you have started the business. The rest of your organizational expenses gets amortized over 15 years.
However, since you are competing for prize money, you could consider that you have already started this business. After all, pro golfers also compete for prize money, and that is their business. If you elect to close the business because your market research indicates that it won't work, then at least you will have gotten credit for your hard work and expenses.
