Business Plan Of Slice Bakery Management Essay

2694 words (11 pages) Essay

1st Jan 1970 Management Reference this

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Introduction

Slice Bakery and Juices is a start up juice and bakery retail establishment located in down town Nairobi. Slice bakers expects to catch the interest of a regular loyal customer base with its wide variety of fresh juices and freshly baked cakes and bread. Slice Bakery and Juices plans to construct a strong market position in the city due to the partners’ industry experience in the area.

The establishment aims to offer its services and products at a reasonably competitive price to meet the demand of the middle and high area residents and tourists.

The Company

Slice Bakery and Juices is incorporated in the city of Nairobi. It is equally owned and managed by its three partners. Mr. David Williams has extensive experience in marketing, sales and management and was the vice chairman of Eveready Batteries and Harper foods. Mr. Arnold Mwangi is experienced in finance and administration and was previously the chief financial officer with both Luigi’s Café and Willy Pastries. Mrs. Felicia Wanjiku is a well respected pastry chef with vast knowledge and experience in the field, she formerly worked at Lagoon beach resort in the Kenyan coast as the head pastry chef.

The organization intends to hire 2 full time pastry cooks and four part time baristas to serve customers and perform the day to day operations.

Products and Services

Slice Bakery and Juices offers a vast range of freshly made fruit and vegetable juice varieties that are brought into the city from various parts of the continent. The company caters to all of its customers by serving each of them a carefully made drink that is specifically tailored to the customers order.

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The bakery side of the company provides a wide array of freshly prepared bread and cake varieties at all times during business hours. Ten to twelve moderately sized batches of assorted bread and cakes are prepared during the day to assure the availability of freshly baked products at all times.

The Market

The Fresh juice industry in Nairobi has recently experienced very fast growth. The worm equatorial temperature in Nairobi stimulates the regular consumption of cool drinks.

Slice Bakery and Juices wants to establish a large regular customer base and it will achieve this by concentrating its marketing and business on local residents, which will be the organizations target market. This will create a healthy, stable revenue base that will ensure the stability of Slice Bakery. In addition tourists are expected to comprise aproximately25% of the total revenue collected. Good visibility and competitive products and services are crucial in order to capture this segment of the market.

Financial Considerations

Slice Bakery and Juices is expected to raise $90,000 of its own capital and to borrow $110,000 guaranteed by the National Bank of Kenya s a ten year loan. The company anticipates sales of around $485,000 in the first year, $570,000 in the second year and $660,000 in the third year. The organization should break even by the fourth month of business as it steadily increases its revenue. Profits for this period are anticipated to be approximately $12,000 in year one, $31,000 by year two and $48,000 by year three. Slice bakers does not expect cash flow problems

Mission

Slice Bakery and Juices aims to offer high quality fresh juice and pastry products at a reasonable price to meet the demand of middle and high income area residents and tourists.

Keys to Success

The following are needed to make Slice Bakers and Juices a success:

Provide the highest possible quality product with excellent customer services.

Competitive pricing.

COMPANY SUMMARY

Slice Bakery and Juices is a bakery and juice shop managed by three partners. These partners represent sales management and financeadministration food and beverage. The partners will provide capital from their own savings which will cover up the start up expenses and also provide a safety net for the first few months of business. A ten year small business administration loan will cover the remaining costs. Slice Bakery and Juices plans to build a small market position within the city due to the mild competition in the business area of Nairobi.

Company Ownership

Slice Bakery and Juices is incorporated in the city of Nairobi. It is equally owned by its three partners.

Start Up Summary

Slice Bakery and Juices’ financing will come from the partners’ capital and the ten year loan from the National Bank of Kenya. The following diagram and table below illustrate the organizations projected initial start up costs.

Start-Up Requirements

Start up expenses:

Legal- $2,000

Premise Renovation- $25,000

Expensed equipment- $37,000

Other- $1,000

Total start-up expenses- $65,000

Start-Up Assets

Cash Required- $63,000

Other current assets- $10,000

Long term assets-$65,000

Total assets- $138,000

Total Requirements- $208,000

Funding

Start up expenses- $65,000

Start-Up Assets – $138,000

Total funding needed- $208,000

Assets

Non-cash assets from start-up- $65,000

Cash requirements from start-up- $73,000

Total assets- $138,000

Liabilities and capital liabilities

Current borrowing- $0

Long tem liabilities – $110,000

Accounts payable- $900

Other current liabilities- $0

Total liabilities- $110,900

Capital

Planned investment

Mr. David Williams- 30,300

Mr. Arnold Mwangi- 30,300

Mrs. Felicia Wanjiku- 30,300

Other- $0

Additional required investment- $0

Total Planned investment- $90,900

Loss at start up (start-up expenses) – $65,000

Total capital- $25,900

Total capital and liabilities- $135,900

Total funding- $208,000

PRODUCTS

Slice Bakery and Juices offers a vast range of juices all from a good quality farms in Africa. The organization caters for its customers by providing them with juice made to suite their individual needs. The bakery provides freshly made pastries and baked products at all times during business hours. Ten to twelve moderately sized batches of various breads and cakes are prepared during the day to assure the availability of freshly baked products at all times.

MARKET ANALYSIS SUMMARY

Slice Bakery and Juices’ main focus is on meeting the growing demand of a regular local resident customer demographic, as well as a number of visiting tourists that pass through the area.

Market Segmentation

Slice Bakery and Juices focuses on the upper and middle income markets, this particular market segment consumes the majority of baked and pastry products.

Local Residents

Slice Bakery and Juices wants to establish a large regular customer base. This will establish reliable and consistent revenue to ensure stability of the establishment.

Tourists

Tourists are expected to comprise aproximately25% of the total revenue collected. Good visibility and competitive quality products and services are crucial in order to capture this market segment.

Market Analysis

The previous chart and table outline the total market potential of the above customer segments

Target Market Segment Strategy

The dominant selected market for Slice Bakery and Juices is a regular flow of local residents. Personal and respectful customer service at a competitive price is the key in maintaining the local market share.

Market Needs

Since Nairobi has a worm climate for most of the year, cool drinks are very much in demand. Much of the day’s activity occurs in the morning just before 9:30am with a steady flow for the rest of the day.

Service Business Analysis

The Fresh juice industry in Nairobi has recently experienced very fast growth. The worm equatorial temperature in Nairobi stimulates the regular consumption of cool drinks. Juice Drinkers in the greater Nairobi city area are finicky about the quality of Juice offered at the numerous Fruit stalls across the area. Despite low competition in the current areal, Slice Bakery and Juices will be located at a place where customers can enjoy a glass of freshly made fruit/vegetable juice with freshly baked cakes in a relaxing environment.

Competition and Buying Patterns

Competition in the area is relatively sparse and does not nearly provide the quality of products and customer services as Slice Bakery and Juices. Local area customers are looking for a high quality product in a peaceful atmosphere.

Leading competitors purchase and squeeze an array of fruits from around the world, make fruit and vegetable salads, a variety of pastries in quality packages and a line of premium packed cocktail drinks(both alcoholic and non-alcoholic). In addition to the companies sales through company operated retail shops

Large chain companies vary their product mix depending on the size of each individual store and its location. Larger stores carry a wide selection of fresh juices in various sizes, flavor and types of packaging, as well as an assortment of fruits and fruit blending equipment and accessories. Smaller shops and kiosks generally sell a full line of Juice varieties, a limited selection of alcohol fruit cocktails and a few more accessories.

Technologically conversant competitors make fruit juices and fruit related products conveniently available via the internet or mail order. Websites that allow online stores that allow customers to browse and purchase the company’s vast array of products and service.

STRATERGY AND IMPLIMENTATION SUMMERY

Slice Bakery and Juices will eventually succeed by offering consumers high quality juices, bread and pastries with personal service at a reasonable and competitive price.

Competitive Edge

Slice Bakery and Juices’ is the relatively low level of competition in the city area targeting this particular demographic.

Sales Strategy

As the graphs below show, Slice Bakery and Juices expects sales of about $485,000 in the first year, $570,000 in the second year and $660,000 in the third year.

C:Documents and SettingsChifMy DocumentswORK_ONLINE2a22e7554c0a4224b23f7935f16cfd66.png

C:Documents and SettingsChifMy DocumentswORK_ONLINEgraph.png

Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Juices 135,000 148,500 163,350

Pastry Items 86,000 94,600 104,060

Other 0 0 0

Total Unit Sales 221,000 243,100 267,410

Unit Prices Year 1 Year 2 Year 3

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Juices $3.00 $3.15 $3.31

Pastry Items $1.00 $1.05 $1.10

Other $0.00 $0.00 $0.00

Sales

Juices $405,000 $467,775 $540,280

Pastry Items $86,000 $99,330 $114,726

Other $0 $0 $0

Total Sales $491,000 $567,105 $655,006

Direct Unit Costs Year 1 Year 2 Year 3

Juices $0.25 $0.26 $0.28

Pastry Items $0.50 $0.53 $0.55

Other $0.00 $0.00 $0.00

Direct Cost of Sales

Juices $33,750 $38,981 $45,023

Pastry Items $43,000 $49,665 $57,363

Other $0 $0 $0

Subtotal Direct Cost of Sales $76,750 $88,646 $102,386

Management Summary

Mr. David Williams has extensive experience in marketing, sales and management and was the vice chairman of Eveready Batteries and Harper foods. Mr. Arnold Mwangi is experienced in finance and administration and was previously the chief financial officer with both Luigi’s Café and Willy Pastries. Mrs. Felicia Wanjiku is a well respected pastry chef with vast knowledge and experience in the field, she formerly worked at Lagoon beach resort in the Kenyan coast as the head pastry chef.

Personnel Plan

As the personnel plan illustrates, Slice Bakery and Juices expects to make significant investments in sales, sales support, and product development personnel.

Managers $100,000 $105,000 $110,250

Pastry Bakers $40,800 $42,840 $44,982

Baristas $120,000 $126,000 $132,300

Other $0 $0 $0

Total People 10 10 10

Total Payroll $260,800 $273,840 $287,532

Financial Plan

Slice Bakery and Juices expects to raise $90,900 of its own capital, and to borrow $110,000 guaranteed by the National Bank of Kenya as a ten-year loan. This provides the bulk of the current financing required.

Break-even Analysis

Slice Bakery and Juices Break-even Analysis is based on the basic average of the first-year figures for total sales by units, and by operating costs. These are presented as per-unit revenue, per-unit price, and fixed costs. These conservative assumptions make room for a more accurate estimate of real risk. Slice Bakery and Juices should break even by the fourth month of its operation as it slowly increases its sales.

http://www.bplans.com/bakery_business_plan/images/73ebe304715e411d80d3e39ff995c767.png

Break-even Analysis

Monthly Units Break-even

17,255

Monthly Revenue Break-even

$38,336

Assumptions:

Average Per-Unit Revenue

$2.22

Average Per-Unit Variable Cost

$0.35

Estimated Monthly Fixed Cost

$32,343

Projected Profit and Loss

As the Profit and Loss table shows, Slice Bakery and Juices expects to continue its steady rise in profitability over the next three years of business.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $491,000 $567,105 $655,006

Direct Cost of Sales $76,750 $88,646 $102,386

Other $0 $0 $0

Total Cost of Sales $76,750 $88,646 $102,386

Gross Margin $414,250 $478,459 $552,620

Gross Margin % 84.37% 84.37% 84.37%

Expenses

Payroll $260,800 $273,840 $287,532

Sales and Marketing and Other Expenses $27,000 $35,200 $71,460

Depreciation $60,000 $69,000 $79,350

Utilities $1,200 $1,260 $1,323

Payroll Taxes $39,120 $41,076 $43,130

Other $0 $0 $0

Total Operating Expenses $388,120 $420,376 $482,795

Profit Before Interest and Taxes $26,130 $58,083 $69,825

EBITDA $86,130 $127,083 $149,175

Interest Expense $10,000 $9,500 $8,250

Taxes Incurred $3,111 $12,146 $15,650

Net Profit $13,019 $36,437 $45,925

Net Profit/Sales 2.65% 6.43% 7.01%

Introduction

Slice Bakery and Juices is a start up juice and bakery retail establishment located in down town Nairobi. Slice bakers expects to catch the interest of a regular loyal customer base with its wide variety of fresh juices and freshly baked cakes and bread. Slice Bakery and Juices plans to construct a strong market position in the city due to the partners’ industry experience in the area.

The establishment aims to offer its services and products at a reasonably competitive price to meet the demand of the middle and high area residents and tourists.

The Company

Slice Bakery and Juices is incorporated in the city of Nairobi. It is equally owned and managed by its three partners. Mr. David Williams has extensive experience in marketing, sales and management and was the vice chairman of Eveready Batteries and Harper foods. Mr. Arnold Mwangi is experienced in finance and administration and was previously the chief financial officer with both Luigi’s Café and Willy Pastries. Mrs. Felicia Wanjiku is a well respected pastry chef with vast knowledge and experience in the field, she formerly worked at Lagoon beach resort in the Kenyan coast as the head pastry chef.

The organization intends to hire 2 full time pastry cooks and four part time baristas to serve customers and perform the day to day operations.

Products and Services

Slice Bakery and Juices offers a vast range of freshly made fruit and vegetable juice varieties that are brought into the city from various parts of the continent. The company caters to all of its customers by serving each of them a carefully made drink that is specifically tailored to the customers order.

The bakery side of the company provides a wide array of freshly prepared bread and cake varieties at all times during business hours. Ten to twelve moderately sized batches of assorted bread and cakes are prepared during the day to assure the availability of freshly baked products at all times.

The Market

The Fresh juice industry in Nairobi has recently experienced very fast growth. The worm equatorial temperature in Nairobi stimulates the regular consumption of cool drinks.

Slice Bakery and Juices wants to establish a large regular customer base and it will achieve this by concentrating its marketing and business on local residents, which will be the organizations target market. This will create a healthy, stable revenue base that will ensure the stability of Slice Bakery. In addition tourists are expected to comprise aproximately25% of the total revenue collected. Good visibility and competitive products and services are crucial in order to capture this segment of the market.

Financial Considerations

Slice Bakery and Juices is expected to raise $90,000 of its own capital and to borrow $110,000 guaranteed by the National Bank of Kenya s a ten year loan. The company anticipates sales of around $485,000 in the first year, $570,000 in the second year and $660,000 in the third year. The organization should break even by the fourth month of business as it steadily increases its revenue. Profits for this period are anticipated to be approximately $12,000 in year one, $31,000 by year two and $48,000 by year three. Slice bakers does not expect cash flow problems

Mission

Slice Bakery and Juices aims to offer high quality fresh juice and pastry products at a reasonable price to meet the demand of middle and high income area residents and tourists.

Keys to Success

The following are needed to make Slice Bakers and Juices a success:

Provide the highest possible quality product with excellent customer services.

Competitive pricing.

COMPANY SUMMARY

Slice Bakery and Juices is a bakery and juice shop managed by three partners. These partners represent sales management and financeadministration food and beverage. The partners will provide capital from their own savings which will cover up the start up expenses and also provide a safety net for the first few months of business. A ten year small business administration loan will cover the remaining costs. Slice Bakery and Juices plans to build a small market position within the city due to the mild competition in the business area of Nairobi.

Company Ownership

Slice Bakery and Juices is incorporated in the city of Nairobi. It is equally owned by its three partners.

Start Up Summary

Slice Bakery and Juices’ financing will come from the partners’ capital and the ten year loan from the National Bank of Kenya. The following diagram and table below illustrate the organizations projected initial start up costs.

Start-Up Requirements

Start up expenses:

Legal- $2,000

Premise Renovation- $25,000

Expensed equipment- $37,000

Other- $1,000

Total start-up expenses- $65,000

Start-Up Assets

Cash Required- $63,000

Other current assets- $10,000

Long term assets-$65,000

Total assets- $138,000

Total Requirements- $208,000

Funding

Start up expenses- $65,000

Start-Up Assets – $138,000

Total funding needed- $208,000

Assets

Non-cash assets from start-up- $65,000

Cash requirements from start-up- $73,000

Total assets- $138,000

Liabilities and capital liabilities

Current borrowing- $0

Long tem liabilities – $110,000

Accounts payable- $900

Other current liabilities- $0

Total liabilities- $110,900

Capital

Planned investment

Mr. David Williams- 30,300

Mr. Arnold Mwangi- 30,300

Mrs. Felicia Wanjiku- 30,300

Other- $0

Additional required investment- $0

Total Planned investment- $90,900

Loss at start up (start-up expenses) – $65,000

Total capital- $25,900

Total capital and liabilities- $135,900

Total funding- $208,000

PRODUCTS

Slice Bakery and Juices offers a vast range of juices all from a good quality farms in Africa. The organization caters for its customers by providing them with juice made to suite their individual needs. The bakery provides freshly made pastries and baked products at all times during business hours. Ten to twelve moderately sized batches of various breads and cakes are prepared during the day to assure the availability of freshly baked products at all times.

MARKET ANALYSIS SUMMARY

Slice Bakery and Juices’ main focus is on meeting the growing demand of a regular local resident customer demographic, as well as a number of visiting tourists that pass through the area.

Market Segmentation

Slice Bakery and Juices focuses on the upper and middle income markets, this particular market segment consumes the majority of baked and pastry products.

Local Residents

Slice Bakery and Juices wants to establish a large regular customer base. This will establish reliable and consistent revenue to ensure stability of the establishment.

Tourists

Tourists are expected to comprise aproximately25% of the total revenue collected. Good visibility and competitive quality products and services are crucial in order to capture this market segment.

Market Analysis

The previous chart and table outline the total market potential of the above customer segments

Target Market Segment Strategy

The dominant selected market for Slice Bakery and Juices is a regular flow of local residents. Personal and respectful customer service at a competitive price is the key in maintaining the local market share.

Market Needs

Since Nairobi has a worm climate for most of the year, cool drinks are very much in demand. Much of the day’s activity occurs in the morning just before 9:30am with a steady flow for the rest of the day.

Service Business Analysis

The Fresh juice industry in Nairobi has recently experienced very fast growth. The worm equatorial temperature in Nairobi stimulates the regular consumption of cool drinks. Juice Drinkers in the greater Nairobi city area are finicky about the quality of Juice offered at the numerous Fruit stalls across the area. Despite low competition in the current areal, Slice Bakery and Juices will be located at a place where customers can enjoy a glass of freshly made fruit/vegetable juice with freshly baked cakes in a relaxing environment.

Competition and Buying Patterns

Competition in the area is relatively sparse and does not nearly provide the quality of products and customer services as Slice Bakery and Juices. Local area customers are looking for a high quality product in a peaceful atmosphere.

Leading competitors purchase and squeeze an array of fruits from around the world, make fruit and vegetable salads, a variety of pastries in quality packages and a line of premium packed cocktail drinks(both alcoholic and non-alcoholic). In addition to the companies sales through company operated retail shops

Large chain companies vary their product mix depending on the size of each individual store and its location. Larger stores carry a wide selection of fresh juices in various sizes, flavor and types of packaging, as well as an assortment of fruits and fruit blending equipment and accessories. Smaller shops and kiosks generally sell a full line of Juice varieties, a limited selection of alcohol fruit cocktails and a few more accessories.

Technologically conversant competitors make fruit juices and fruit related products conveniently available via the internet or mail order. Websites that allow online stores that allow customers to browse and purchase the company’s vast array of products and service.

STRATERGY AND IMPLIMENTATION SUMMERY

Slice Bakery and Juices will eventually succeed by offering consumers high quality juices, bread and pastries with personal service at a reasonable and competitive price.

Competitive Edge

Slice Bakery and Juices’ is the relatively low level of competition in the city area targeting this particular demographic.

Sales Strategy

As the graphs below show, Slice Bakery and Juices expects sales of about $485,000 in the first year, $570,000 in the second year and $660,000 in the third year.

C:Documents and SettingsChifMy DocumentswORK_ONLINE2a22e7554c0a4224b23f7935f16cfd66.png

C:Documents and SettingsChifMy DocumentswORK_ONLINEgraph.png

Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Juices 135,000 148,500 163,350

Pastry Items 86,000 94,600 104,060

Other 0 0 0

Total Unit Sales 221,000 243,100 267,410

Unit Prices Year 1 Year 2 Year 3

Juices $3.00 $3.15 $3.31

Pastry Items $1.00 $1.05 $1.10

Other $0.00 $0.00 $0.00

Sales

Juices $405,000 $467,775 $540,280

Pastry Items $86,000 $99,330 $114,726

Other $0 $0 $0

Total Sales $491,000 $567,105 $655,006

Direct Unit Costs Year 1 Year 2 Year 3

Juices $0.25 $0.26 $0.28

Pastry Items $0.50 $0.53 $0.55

Other $0.00 $0.00 $0.00

Direct Cost of Sales

Juices $33,750 $38,981 $45,023

Pastry Items $43,000 $49,665 $57,363

Other $0 $0 $0

Subtotal Direct Cost of Sales $76,750 $88,646 $102,386

Management Summary

Mr. David Williams has extensive experience in marketing, sales and management and was the vice chairman of Eveready Batteries and Harper foods. Mr. Arnold Mwangi is experienced in finance and administration and was previously the chief financial officer with both Luigi’s Café and Willy Pastries. Mrs. Felicia Wanjiku is a well respected pastry chef with vast knowledge and experience in the field, she formerly worked at Lagoon beach resort in the Kenyan coast as the head pastry chef.

Personnel Plan

As the personnel plan illustrates, Slice Bakery and Juices expects to make significant investments in sales, sales support, and product development personnel.

Managers $100,000 $105,000 $110,250

Pastry Bakers $40,800 $42,840 $44,982

Baristas $120,000 $126,000 $132,300

Other $0 $0 $0

Total People 10 10 10

Total Payroll $260,800 $273,840 $287,532

Financial Plan

Slice Bakery and Juices expects to raise $90,900 of its own capital, and to borrow $110,000 guaranteed by the National Bank of Kenya as a ten-year loan. This provides the bulk of the current financing required.

Break-even Analysis

Slice Bakery and Juices Break-even Analysis is based on the basic average of the first-year figures for total sales by units, and by operating costs. These are presented as per-unit revenue, per-unit price, and fixed costs. These conservative assumptions make room for a more accurate estimate of real risk. Slice Bakery and Juices should break even by the fourth month of its operation as it slowly increases its sales.

http://www.bplans.com/bakery_business_plan/images/73ebe304715e411d80d3e39ff995c767.png

Break-even Analysis

Monthly Units Break-even

17,255

Monthly Revenue Break-even

$38,336

Assumptions:

Average Per-Unit Revenue

$2.22

Average Per-Unit Variable Cost

$0.35

Estimated Monthly Fixed Cost

$32,343

Projected Profit and Loss

As the Profit and Loss table shows, Slice Bakery and Juices expects to continue its steady rise in profitability over the next three years of business.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $491,000 $567,105 $655,006

Direct Cost of Sales $76,750 $88,646 $102,386

Other $0 $0 $0

Total Cost of Sales $76,750 $88,646 $102,386

Gross Margin $414,250 $478,459 $552,620

Gross Margin % 84.37% 84.37% 84.37%

Expenses

Payroll $260,800 $273,840 $287,532

Sales and Marketing and Other Expenses $27,000 $35,200 $71,460

Depreciation $60,000 $69,000 $79,350

Utilities $1,200 $1,260 $1,323

Payroll Taxes $39,120 $41,076 $43,130

Other $0 $0 $0

Total Operating Expenses $388,120 $420,376 $482,795

Profit Before Interest and Taxes $26,130 $58,083 $69,825

EBITDA $86,130 $127,083 $149,175

Interest Expense $10,000 $9,500 $8,250

Taxes Incurred $3,111 $12,146 $15,650

Net Profit $13,019 $36,437 $45,925

Net Profit/Sales 2.65% 6.43% 7.01%

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