TO:

Dr. Lynn F. Hudson

FROM:

Mason Chronister

DATE:

November 25, 2013

SUBJECT:

Request for Internship Credit

This week I was offered and accepted an internship at the newly created Palm Beach Pet Center,
which is a joint venture between Dr. Erin Faulk, owner of the Palm Beach Pet Care, a veterinary
clinic, and Mr. Douglas Schmidt, an entrepreneur. The new business integrates the veterinary
clinic with a full-service luxury pet boarding, grooming, and boutique center.
This position offers me a great opportunity to work in an environment that I have learned about
in my Small Business Management and Financial Management course at the same time that I
apply the word processing and document formatting skills that I have learned in your class. I will
work with Dr. Faulk and Mr. Schmidt to develop standard operating procedures and to
standardize the formats for letters, memos, reports, table styles, and for docuemnts that are
specifically related in the business. They both have indicated to me that they expect me to take
full responsibility for my position and expect little direct supervision.
I agreed to work for a minimum of six months at tleast 10 hours per week, and I have the option to
work as many as 25 hours a week. My plan is to average 20 hours per week. The type of positon
and the number of hours worked meet and exceed all of the requirements for receiving academic
credit for my internship. Dr. Faulk and Mr. Schmidt both agreed to evaluate my work and
complete the necessary forms required for the internship. Therefore, I respectfully request that
you approve this internship for academic credit.
Please let me know if you need additional information.
mc

Palm Beach Pet Center

1985 Parker Avenue | West Palm Beach, FL 33401-7239
Telephone: 561-555-0127 | Fax: 561-555-0159 | www.pbpc-sw.com

November 25, 2013

Ms. Gabriella Anez

Palm Beach Professional Services
2486 S. Lake Avenue
West Palm Beach, FL 33401-7828
Dear Ms. Anez:
Erin Faulk and I have reviewed all of the materials that you and her professional advisors
submitted to us. We were pleased that both of our legal and financial advisors provided the same
options and very similar analyses.
Each of the alternatives has unique advantages and disadvantages. However, after much
discussion, we both agree that the joint venture with each party having 50 percent equity is the
best option. The values of the ongoing Palm Beach Pet Care business, the ten acres of adjacent
property, and the proportionate shares of construction costs are equitable.
Our accountants presented proformas that make this venture a very exciting one, and we are
ready to begin work on the project immediately. We have both signed the form authorizing our
professional representatives to finalize the transaction. Your copy is enclosed. We hope to have
the transaction completed within two weeks.
Thank you for the excellent work you have done on this project.
Sincerely,

Douglas C. Schmidt
mc
c

Erin A. Faulk, DVM

Enclosure

Palm Beach Pet Center

1985 Parker Avenue | West Palm Beach, FL 33401-7239
Telephone: 561-555-0127 | Fax: 561-555-0159 | www.pbpc-sw.com
November 25, 2013

Mr. Lee Tims

Tims and Associates
423 Fern Street
West Palm Beach, FL 33401-5939
Dear Mr. Tims
Doug Schmidt and I have reviewed all of the materials that you and his professional advisors
submitted to us. We were pleased that both of our legal and financial advisors provided the same
options and very similar analyses.
Each of the alternatives has unique advantages and disadvantages. However, after much
discussion, we both agree that the joint venture with each party having 50 percent equity is the
best option. The values of the ongoing Palm Beach Pet Care business, the ten acres of adjacent
property, and the proportionate shares of construction costs are equitable.
Our accountants presented proformas that make this venture a very exciting one, and we are
ready to begin work on the project immediately. We have both signed the form authorizing our
professional representatives to finalize the transaction. Your copy is enclosed. We hope to have
the transaction completed within the next two weeks.
Thank you for the excellent work you have done on this project.
Sincerely

Erin Faulk
mc
Enclosure
c

Douglas C. Schmidt

Sports Connection

5600 St. Charles Avenue, New Orleans, LA 70115-8264

Telephone: 504-555-0139 Fax: 504-555-0131 www.sportsconnection.org

Palm Beach Pet Center

Business Plan
Preliminary Data
Mason Chronister

2013

Palm Beach Pet Center|1985 Parker Avenue|West Palm Beach FL,33401-7239

Table of Contents
Revenue Projections ...............................................................................................................................1
Historical and Market Data ...................................................................................................................1
Revenue Potential Analyzed ..................................................................................................................1
Veterinary Clinic.................................................................................................................................1
Luxury Suite Boarding ....................................................................................................................... 2
Doggie Day Camp .............................................................................................................................. 2
Pet Grooming and Spa ...................................................................................................................... 3
Boutique............................................................................................................................................. 3
Total Revenue Projections .................................................................................................................... 3
Comparison to Proformas ..................................................................................................................... 4
Palm Beach Pet Center Profitability ..................................................................................................... 4

ii

Table of Figures
Figure 1 Projected Monthly and Annual Revenue................................................................................ 3
Figure 2 Projected Revenue Sources ..................................................................................................... 4

iii

Palm Beach Pet Center Business Plan

Preliminary Data
The Palm Beach Pet Center is a new venture that integrates an existing successful veterinary
clinic, Palm Beach Pet Care, with a full-service luxury pet boarding, grooming, day camp, and
boutique center. The joint venture has been branded as Palm Beach Pet Center.

Revenue Projections
The purpose of this study is to analyze the revenue-generating potential of each segment of the
center and project the contribution each segment can be expected to make during the first year of
operation. Accurate revenue projections are needed to complete the business plan.

Historical and Market Data

Palm Beach Pet Center has historical data only for Palm Beach Pet Care, the veterinary clinic,
which has been operated by Dr. Erin Faulk for more than five years. Sources of data for the luxury
boarding segment, the day camp, the grooming and spa facility, and the boutique are based on
surveys of clients of the veterinary clinic, industry data, and on market research in the Palm Beach
area. Focus groups were held with representatives of beach resorts, luxury villa rentals, and
luxury marine operations.

Revenue Potential Analyzed

Both qualitative and quantitative data were analyzed to determine the revenue potential for each
market segment. A conservative approach was used in the analysis because the negative
consequences of projections on the high side were much more significant than projections on the
low side.

Veterinary Clinic
The clinic, formerly known as Palm Beach Pet Care, is located near a very high-income residential
and resort area. Most clients are owned by affluent families. The clinic also has a relationship
with the managers of several resorts and luxury villa rental companies. Because of lack of space,
boarding has been limited to pets with medical conditions being treated by Dr. Faulk and to
selected clients.

2
Growth of the veterinary business has been flat for the past two years because the facilities were
fully utilized. 1 Very few new clients were accepted because the center was operating at full
capacity. Growth for the first year has been projected at 20 percent. New board-certified
veterinarians and trained technicians will be phased in during the year. Completion of the new
surgical facilities is scheduled within three months. Installation of the new technology and
reorganization of the operations are expected to take approximately six weeks. Major growth is
expected in the second year of operation when all facilities are fully utilized. The revenue
projection for this segment is $900,000.

Luxury Suite Boarding

Both standard units and luxury suites are included in this segment. A number of kennels and
boarding facilities operate within the Palm Beach area. Several are upscale facilities, but they do
not offer true luxury suites for discriminating clientele who want their pets pampered. Even the
Palm Beach Pet Center standard units are more upscale than the typical luxury suites at other
facilities. Industry data show that luxury suites are in high demand in high-income residential
and resort areas comparable to the Palm Beach area. 2
Clients bringing pets in for medical treatment were surveyed to determine how frequently they
would use boarding facilities and the type of facilities desired. Clients clearly indicated a strong
preference both for using the Palm Beach Pet Center and for luxury accommodations for their
pets. 3 Local market data showed that upscale facilities were more profitable than moderately
priced facilities. The revenue projection for this segment is $480,000.

Doggie Day Camp

Historically, this segment of the industry accounted for a very small part of the market. However,
during the past three years, this area has grown dramatically. Information we collected shows
that growth in the use of Doggie Day Camp facilities has grown more than 40 percent nationally.4
Day camp facilities in the Palm Beach area appear to be in high demand with visitors as well as
with local residents who do not have full-time help at home. Focus groups with managers of
resorts and luxury villa rental companies confirmed the need for day camp facilities. Luxury boat
owners and renters also represent a significant portion of this market. Projected revenue for this
segment is $240,000.

Revenues were $750,000 for last year and $725,000 for the prior year.

Data were analyzed on six luxury facilities in six different states.

More than 95 percent of those surveyed indicated they would use Palm Beach Pet Center for boarding
their pets at least three days a month, and approximately 80 percent said they preferred luxury
accommodations to standard units. A table of comparative costs was provided to participants prior to
answering the questions.

Day camps are more popular in resort areas than in other areas.

Pet Grooming and Spa

The primary source of data for this segment was the surveys of clients who brought their pets in
for medical treatment. A major requisite for success in this area is one-stop shopping. Clients
indicated in the interviews that they want to have grooming and spa treatments done while pets
are receiving other services such as medical attention or are being kept in day camp or in the
overnight boarding facility. Both national industry data and local market data were analyzed.
The revenue projected for this segment is $300,000.

Boutique
Success of the retail operation is more difficult to predict than other segments of the business.
The one-stop shopping phenomenon is critical in this area. Having an attractive display of items
that appeal to pet owners promotes impulse shopping, which is important in a high-income area.
Having premium pet food in the boutique that is generally not available in other outlets is also
important. The pharmacy can be operated out of either the veterinary clinic or the boutique.
Current plans are to locate the pharmacy in the boutique to increase the traffic flowing through
the retail area. It was very difficult to obtain reliable data in this area, but the analysis team
believes that the projections will be met because they are so conservative. Revenue projections
for the first year are $144,000.

Total Revenue Projections

Revenue projections for all of the segments are provided on a monthly and an annual basis. The
monthly revenue figures are averages. Averages were used because data were not available to
determine the seasonal impact. Figure 1 summarizes the revenue projections for the first year of
operation.
Palm Beach Pet Center
Veterinary Clinic
Pet Boarding
Grooming and Spa
Doggie Day Camp
Boutique
Total Annual Revenue

Monthly Revenue

Annual Revenue

$75,000
40,000
25,000
20,000
12,000
$172,000.00

$900,000
480,000
300,000
240,000
144,000
$2,064,000.00

Figure 1 Projected Monthly and Annual Revenue

The projections for revenues for the first year of operation are significantly higher than originally
anticipated.
Figure 2 shows the percentage of revenue contributed by each of the five segments of Palm Beach
Pet Center.

Veterinary
Clinic
43%

Boutique

Pet Boarding

7%

23%

Projected
Revenue
Sources

Doggie Day
Camp

Grooming
and Spa

12%

15%

Figure 2 Projected Revenue Sources

Note from Figure 2 that the veterinary clinic and the pet boarding segments are projected to
produce approximately two-thirds of the total revenue for the first year of operation.

Comparison to Proformas
The initial Proformas prepared when the joint venture was formed projected revenue for the first
year of operation to be $1,400,000. The initial Proformas assumed that the new surgical facilities
would not be completed during the first year of operation and only the standard units would be
available. Completion of both the surgical facilities and the luxury suites is scheduled within
three months and can be fully utilized within six months. Therefore, the current revenue
projections are $664,000 higher than the initial projections. These projections are conservative
and are based on solid data.

Palm Beach Pet Center Profitability

The expense projections need to be updated to reflect the additional variable costs that result
from the availability of the surgical facilities and the luxury suites during the last six months of
the first year of operation. Virtually all of the fixed costs have already been accounted for;
therefore, most of the additional revenue projected will go directly to the bottom line.
Profitability for the first year of operation has been enhanced significantly.

Sports Connection

5600 St. Charles Avenue, New Orleans, LA 70115-8264

Telephone: 504-555-0139 Fax: 504-555-0131 www.sportsconnection.org
TO:
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