If you feel she's ready for it, and she feels ready for it, AND her teacher feels ready for it, it wouldn't hurt to try to find a competition - you don't need to enter yet. I would try to make sure that the piece she plays is either something she's already working on normally or one she wouldn't need an excessive amount of time to learn - you want it to be a good, challenging experience but not too stressful since it's her first competition.
I don't know if something exists like this where you live, or for her age, but could you find a Solo and Ensemble type thing? Usually the way they work is: the student plays a solo (or a duet, trio, etc) for a judge. They receive a rating, I-IV, with I being the best. I've only seen them in my area for middle and high schoolers, but I googled it and saw one elsewhere for younger students. Plus, the youngest students could opt for a "comments only" judging system (versus rating and comments). This would be really nice if you could find it, because she's still got the motivation to do well and a competitive atmosphere, but she's only competing against herself. Also, if you go comments only, it would be a nice way to see if she likes it. You could even try a duet, if she liked that idea. However, you'd probably find something in that style, but not called Solo and Ensemble, at that age.
