Running a Business
There are many mistakes that first time business owners make that could be prevented if they knew how to run a good business.
How to Run a Successful Business
This is a guide for ins and outs of running a business.
How to create an Organization account
For creating an Organization it is required to have 5 gold. Go to My Places, from the drop down menu go to Organizations. Select Create New and follow simple instructions. There are no special names or logos that you need to use chose anything you would like for it won't make a difference in eRepublik. Once you have the Organization set up you would need to go back to your personal account and donate gold to your Organization account.
Is Organization necessary
There are few reasons why you would want to have an Organization to run a successful business. You can own a company and still work for another company to make enough money to support your company in case of a financial crisis. 2) You can also be employed in your own Company and set the amount of money you need to be making in order to buy food and gifts for your wellness. 3) You may change your residency without worrying of taking your company with you.
How much is needed to start a business
The cost of creating a new company is 20 Gold. I would not suggest anyone to create a company once they have 20 Gold. After creating your company you would need to hire employees and pay your expenses to start your business. I would suggest you go around in the market and search for companies that are on sale. You can find companies on sale for as low as 14 gold, that is lower then creating one. Use the rest 6 gold to buy yourself money to pay your expenses. Make sure you do some research on the companies you do want to purchase, sometimes the companies could worth nothing, depending on the productivity level. If the productivity is medium or no productivity you want to stay away from these companies. In case you don't find any descent companies to purchase, use 20 gold and create your own company make sure you have enough money to start the business. If you do not have an Organization you would need to make sure you have enough money to run a stable company since you will not have any alternative ways of making money until your company makes you enough profit.
How to chose the company you want to buy/create
By the time you collect enough gold and money to buy/create a company you should be very well experienced in your current job. For those who will have their company set up in an Organization, it is recommended to create a company in the same industry as you have an experience in. This is to guarantee production even if you hire only your own citizen account. On all other instances you may chose the company you like the most or you may do some research and see what the need is for today.
Which companies to buy/create
Many of the companies use raw materials such as grain, wood, iron, oil and diamonds. Others are to make the raw materials. For a starter in the business it is hard to decide which company to buy/create, a Raw Material, Manufacturing or Construction companies. Manufacturing companies require grain, diamonds, iron, or oil as their RM and are optimal with 10 employees. Construction companies require wood and are optimal with 20 employees. Manufactured products take 1,2,5, or 10 production points to make a product, while constructed products need 200 or 2000 points to make a product. As such, manufacturing is easier to enter than construction because there are fewer employees to pay and products are finished quicker. Construction Company has a decent barrier to entry because of the 20 employee max productivity and you have to front the cost of the house/hosp/DS until it sells. Raw Material Companies are much simpler to manage and calculate break-even product price, but they require a lot of initial capital to make a profit because of the productivity scaling with quality levels. Q3 is roughly the level where it becomes profitable (50+20+20=90 Gold). Since it could be very arguable as to which one to chose for a starter in the business, it is your choice to choose whichever one you want. Either way you would need to make sure you have enough funds to cover all the initial expenses and managing expenses before you start making profit.
Since it is very hard find dedicated employees first you would need to look into your friends list and see if there is anyone you can hire with an affordable wage. If you do not have friends who want to work for you, then you would need to hire others. It is always recommended to hire well experienced employees, however you do not need to do this right away. You may add a job offer to hire beginners with 0 experience in the field. In order for you to decide how much salary you need to post, you would need to go to the human resources to find out what the average salary is now. Now that you know the average salary you need to start hiring. Hire at least as many employees as you have max productivity shown in your company employees section. Once you have hired the employees you need to keep an eye on them to make sure they work every day. If you see that an employee doesn't work for more then 3 days you may fire them and get yourself new employees. Non working employees do more harm then help to your company. But before you go on and fire your current employees you want to make sure you hire new ones first. Non working employees are not completely useless they will increase the efficiency of your active workers. Fire the non working employees after you hire new ones. Another thing to keep on checking is the wellness of your employees. Wellness is a main factor in the productivity, therefore, you mane to make sure your employees are well enough to work.
How to keep your employees from quitting
The best way of insuring steady productivity from your employees is to make sure you keep them happy at all times. The first thing an employee does is he makes sure he gets paid a decent salary. In order to make sure you are paying your employees what they deserve, you need to go to the human resources and see what the average rate for the given skill levels are. Let's assume you have an oil company. Once you go to the human resources you will have to chose the specific industry you are trying to view. In the products section select land, skill level select all and chose the US market. From here you will be able to identify how much would any skill level get paid. As your employees progress in skills you need to make sure to give them raise in timely manner. Always keep funds available to pay your employees. In case you will be short of funds for a day notify your employees that you will take care of the issue ASAP.
Selling your products
You will not make profit from the first day, it takes time, dedication and expenses to achieve your goals. In due time you will be making profit make sure you save up as much as possible. One of the important things is getting higher Q in your production. To get higher Q you would need to have more gold. Once you have higher Q your products will have more value, more value means more profit. Try to get your company to at least Q3 before you progress in creating another company.
Getting Market License
Getting a market license could bring you more profit only if you have enough production. Sometimes it's good to be selling within your eCountry while other times if the need is low in your eCountry you should try to sell it in another eCountry. Since any currency can be traded from gold you should not have any problems of making other currency and trading it for gold.
How should I price my item? (Construction/Manufacturing Company Owners)
As a Q1 company, it is hard to decide how you want to price your items. The general idea is to assume all of your employees work every day. Get a rough estimate of what they each produce and how much Raw Materials (henceforth referred to as RM) they use each day to make whatever you produce. Then figure out how many they produce per diem and calculate the cost yourself so that you make a profit (obviously do not gauge the consumer but you can't just break even every day).
As a Q2 company owner you are going to need more materials and are going to probably be paying your employees more. This should work out roughly, to double what a Q1 company is charging. Obviously, if you can sell for a little less than do so, but you should do your best to keep your prices roughly twice the Q1 companies.
As a Q3 company owner you are going to need thrice the amount of materials as Q1 company owners and will need high skilled employees who they will be paying higher salaries. In your case, selling products for slightly more than three times a Q1 is acceptable.
How should I price my items? (Raw Materials Owners)
For all Q owners, this is both harder and easier to price out, therefore, it is broke down into separate categories.
Owners in High Productivity Regions
You guys are the smartest of all. You had the foresight to start your company or buy a pre-existing company in a High Productivity region. This boosts your productivity multiplier and allows you to make more money. So between how good your employees are and the high productivity multiplier you should be well off. The difficulty is in trying to figure out a good price to make profit on while offering competitive prices. This you'll have to do by analyzing the marketplace and smartly paying your employees.
Owners in High Productivity Regions are lucky, you don't have to deal with low import taxes.
Owners in Medium Productivity Regions
You aren't as smart as the guys in High Productivity Regions but don't worry, what you will probably be facing foreign competition as well as limited domestic competition. You guys have it harder and therefore will have to work harder. I commend all of you for trying, and if so, succeeding.
The trick for you guys is to read articles that explain the benefits of upgrading quality. I remember reading a series published by denversbest02 (Congressman from Colorado) about how if you are in a Medium Region, and you upgrade your Quality level, not only will you make a greater deal of profit but it will negate the multiplier that the region applies.
Pricing Products in General (the same scale applies here as it did in the first section)
- Q1 is dependent upon costs (in your case only the pay of the employees)
- Q2 should be double Q1
- Q3 should be triple Q1
People often wonder where and what type of a company to create/purchase.
When creating a raw materials company, you should create or buy one that is located in a high productivity region. It is very important to remember when you create or buy a company, it's location cannot be changed. You would need to reside in the preferred location before creating the company. The company you purchase will stay in the same region where it was created.
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