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The recent Silverjet collapse typifies the inherent risk for new business start-ups as they seek to develop market share and brand awareness says Business and Personal Management Guru John Whiteman.

Companies quite simply fail when they run out of money and this is exactly what happened in the Internet boom and has now happened to Silverjet.

There are many reasons why companies fail but in the main, irrespective of external events such as increased fuel charges and credit conditions, Silverjet’s failure must fall as the responsibility of Management and their struggle with trying to rapidly move into a marketplace over a short period of time rather than through gradual progressive evolvement.

In many cases what is likely is that the cost of obtaining new clients through Advertising and Media has not allowed Silverjet to adapt with changes in market conditions that always occur in the life of a business. John always recommends that substantial spending on such areas like advertising and media should always be scalable and adjusted when market conditions change. A business takes a massive risk when they try and buy market share. Sometimes it works in the case of companies, such as Amazon, but having a significant burn rate only works if someone is prepared to continually top up a company with funds. With any company an awareness of where you are financially at any time is paramount. With this awareness having a structure in place to scale your business allows you to stay in business. If you know where you are it is easier to see where you are going.

It is an easy trap to fall into when the product such as Silverjet was superior and so the confidence of its management team would have allowed them to be bullish of the market and future prospects.

John stresses that as much as we like things to ‘take off’ rapidly, things just take time and by taking one step at a time companies are more likely to stay in business for the long term and are more able to ride the waves of a changing market.

John feels that the prospects for Silverjet are still strong if quick and decisive action is taken by Laurence Hunt or other parties to purchase the company out of administration and begin flying again. If Laurence can do this and work to secure the position of his former employees a success can come from Silverjet’s setback.

John Whiteman
River Management
Business and Personal Management
www.rivermanagement.co.uk
telephone:0207 183 2244

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