Create an assumption sheet and income statement sheet for this problem

In January $2014$ Jonathan Drewnowsky, an undergraduate business student, came across

a product called miswak while searching online for a biodegradable alternative to gum.

Made from the branches of the salvadora persica tree, miswak was a natural and fully

biodegradable toothbrush alternative. Drewnowsky wanted to research the possibility

of

starting a business to sell a miswak product in Canada. He presented the concept to

classmates Christine Peet, Leigh Cohen, Brendan Schwartz, Amanda Juliane van

Lieshout, and Andrew Shilon, who chose to explore the feasibility of starting The

Miswak Com

pany $($TMC$)$ based out of London, Ontario, Canada for a class project.

If the business was deemed feasible, it would be set up as a partnership between

Drewnowsky and Peet. The goals of the business would be to maintain a socially and

environmentally respon

sible business profile and to provide a minimum of $$10,000$ in

compensation to each of the two partners in each of the first three years of operation. A

total of $$50,000$ was available for the initial investment; however, the group wondered if

the investment

was sufficient to start the business and if not, how much additional

financing would be required. Together, the group gathered industry, consumer,

competitor and financial information that they would use to assess the feasibility of

starting TMC in Septem

ber $2014.$

THE PARTNERS

Drewnowsky and Peet had been exposed to and participated in entrepreneurial and

socially responsible activities although neither had owned or operated a business.

Drewnowsky

grew up watching his father work alongside his uncle in a family run home

inspection business and was active during his high school years as the Student Council

Environmental Representative. He considered entrepreneurship as a viable career

opportunity up

on graduation from his post

$-$

secondary studies.

Peet on the other hand, had worked as a freelancer designing marketing materials for a

yoga and wellness studio during high school. She was actively looking for an internship

in order to acquire the experienc

e necessary to enable her to break into a marketing role

in a large multinational. She thought that starting TMC might be a good opportunity to

build her skill set.

MISWAK

The twigs, stems and roots of the salvadora persica tree, grown in hot and dry co

nditions

The Miswak Company.docx

$2$

in parts of Africa, the Middle East and the Arabian Peninsula, had been used for oral

hygiene for over $7,000$ years beginning with Ancient Arabs and Egyptians.

$1$

Miswak

continued to be used widely in Saudi Arabia and in other Muslim countries for a

combination of dental hygiene and religious reasons

$2$

and in other parts of the world

including Asia, Africa and the Americas.

Once harvested and processed, the end product appeared to be a regular stick about the

size of a pencil $($Exhibit $1).$ Users shaved

off a thin layer of bark with a sharp object in

order to expose the soft inner core which became like soft bristles when wet. Users could

then brush their teeth as they would with a regular toothbrush. After being used several

times, users could either di

scard the stick or shave off the old bristles so that new bristles

could be formed. Chewing on or brushing with miswak was effective at removing plaque

and inhibiting bacteria growth that could lead to oral diseases.

$3$

Research showed that

using miswak for

oral hygiene was at least as effective as toothbrushing for reducing

plaque and gingivitis.

$4$

Miswak also contained anti

$-$

inflammatory and antibacterial

properties which remained present, even after a month$$s use.

$5$

NORTH AMERICAL ORAL CARE INDUSTRY

The Ca

nadian Dental Association recommended a mix of personal dental care alongside

the care of a dentist in order to maintain good dental health. Personal dental care

recommendations usually included brushing twice daily, flossing daily, replacing

toothbrushes

every three to four months $($or earlier if bristles were frayed$)$ and eating a

healthy diet. More than $90$ per cent of adults claimed to use brushing their teeth with

toothpaste and a toothbrush as their main form of oral care.

$6$

According to the Canadian Den

tal Hygienists Association, $$Canadians spend $13$ billion

dollars a year on oral health care, diseases, and injuries that are almost all preventable$.$

$7$

Spending on oral care increased $11$ per cent between $2008$ and $2011$

$8$

while

natural$/$organic personal care sa

les jumped $50$ per cent from $2005$ to $2010.$

$9$

ISSUES WITH TRADITIONAL ORAL CARE

The average toothbrush could contain $10$ million bacteria or more as a result of storage

near sinks and toilets or in closed containers and as a result of sharing.

$10$

The efictiveness of the toothbrush was also impacted by the length of time it was used before

replacement. Frayed and worn bristles made it more difficult for the toothbrush to remove

plaque and other debris from the teeth which could lead to dental proble