So you mark shoes down and put them on sale for $79.99. You make some sales and a profit. Six months later you still have about 30 pairs left. So you mark price down again and begin selling shoes for $59.99. The profit margin has decreased but you are still making a profit. You find that shoes sell quickly and all 30 are sold within a month.

If you sell all forty shoes at $99.99 you will make a $2400 profit. However, let’s say that at $99.99 product does not move quickly. You end up having these shoes in stock for four years. So it takes four years to make $2400 profit.

However, if you find you can lower price, shoes sell quickly but after selling all forty at price of $59.99 you have only made $800 profit. Lets say you sold all forty pairs in a month, and then invested in another forty pairs. Each month you sell all forty pairs and each month you invest in another forty pairs. By end of year you have earned $9600 in profit.

By sticking to $99.99 price, just because there is more profit per item, you only sell ten shoes by end of year. Your total profit is $600.

$9600 is a lot better than $600. That is beauty of Stock Rotation Philosophy. Many people, especially business people understand this principle and if reading this article, will respond with a”duh!” However, it is surprising even to me, how many people fail to understand this basic ROI concept.

While body of business plan should be 15 to 25 pages, Appendix can be used for supplemental information. The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.

If Appendix is long, a divider should be used to separate it from body of plan, or a separate Appendix document should be prepared. These techniques ensure that investor is not handed a thick business plan, which will make them queasy before even opening it up.

To summarize, goal of business plan is to create interest – not to have an investor write you a check. In creating interest, full story of your company need not be told. Rather, plan should include essential elements regarding why an investor should invest and spend more time examining business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, “If I had more time, I would write a shorter story.” Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately rewards are significant.