The Miswak Company

Two undergraduate business students wanted to assess the feasibility of starting a business that would sell an all-natural and completely biodegradable alternative toothbrush — the Miswak. A total of $50,000 had already been secured for the initial investment; however, the young partners wondered whether this investment would be sufficient to sustain the cash flows of the business for its first three years of operations and, if not, how much additional funding would be needed. To discover whether their proposed venture would be feasible, the pair set out to perform a variety of qualitative and quantitative analyses.

This case is intended for use with senior undergraduate students in courses that focus on entrepreneurship, financial management, or managerial accounting. Before attempting the case, students must be capable of performing industry, competitive, and consumer (SWOT) analyses, as well as conducting unit contribution and breakeven analyses and projecting financial statements. The case can be positioned as a course assessment tool in an individual or group setting. Upon successful completion of the case, students should be able to conduct the following activities:<ul><li>Perform industry, competitive, and consumer analyses in order to identify the risks and opportunities associated with the venture.</li><li>Prepare detailed cash budgets, incorporating sensitivity analysis to determine financing requirements.</li><li>Prepare projected income statements and balance sheets.</li><li>Perform a breakeven analysis to assess the riskiness of the venture.</li><li>Make a recommendation about whether to proceed with the venture, including any alterations to the original plans.</ul></li>

• Financial analysis, projections, break-even, Canada