Yaco 561 Week 2 Business Proposal

Business ProposalJennifer YacovazziECO/561April 14, 2014Dennis McGuckianBusiness Proposal“Doctors of Veterinary Medicine are medical professionals, whose main obligation is protecting the health and happiness of animals and people. The first College of Veterinary Medicine in the United States was established in 1879 at Iowa State University” (Veterinary Medicine, n.d.). Before this era pets were healed by veterinarians taught in Europe or by people lacking any proper training. Veterinary medicine has advanced quickly in the last one hundred years. “Today’s veterinarians are responsible for the health of approximately 52 million dogs and 55 million cats” (Veterinary Medicine, n.d.).
In this day and age there is usually a veterinary clinic
If a small change in price brings about a large change in quantity (i.e. a 1% change in price yields a 2% increase in the quantity demanded) the good or service is elastic (Bain & Dicks, 2014). If, however, a small change in price brings about an even smaller change in the amount (i.e. a 1% change in price yields a 0.2% increase in quantity demanded) the good or service is said to have a price inelastic demand (Bain & Dicks, 2014). “The price elasticity of demand tackled by the monopolistically competitive market depends on the amount of competitors and the number of product differences” (McConnell, Brue & Flynn, 2009). “The larger the number of competitor the weaker the product differences, the higher the price elasticity of each seller’s need, this is, the closer monopolistic competition will be a pure competition” (McConnell, Brue & Flynn, 2009). The veterinary business is in an inflexible environment. “A purely elastic demand means as the price goes down the market goes up. Inelastic demand means small changes in price have no effect on the market” (Veterinary Economics 101, 2008). If you reduce prices to increase revenue you will hurt your business in the long run. “In fact, in an average practice, if you drop fees 10% you would need to increase business by 30%-40% just to make the same profits” (Veterinary Economics 101,
“Let’s take surgeries, for example, and assume your fixed costs (i.e. rent/mortgage things that don’t change depending on how busy you are) are $1000 per month attributable to your surgery room. Then add up the variable costs: surgeon time, suture, anesthesia, autoclave costs, cage space, and technician time attributable to surgery. Let’s say this is $100 per procedure. So your surgery costs are $1000 per month PLUS $100 per procedure. If you charge $250 per procedure, you will have to do 7 per month to cover your fixed costs. But on the eighth, or marginal, procedure your cost is only $100, netting you $150 profit for each procedure you do above 7 per month” (Olcott, 2012). Depending on the financial figures of the clinic will help to determine if there will be any changes in the variable costs for services or