Tutorial : How to start a profitable business - Part 7
Day 817, 05:40
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Published in Greece 
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by
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by Apotygma
Nowadays, everyone in eRepublik wants to start a company. Starting a company is the first step towards the wealth. It is also part of one of the main elements in eRepublik : economy. A lot of people seem to forget that eRepublik isn’t only about war, especially with the WW4 taking place right now, but also about economy. Every single product on the market is produced by a company owned by a player or by the state, even this last one can be considered as a player.
During the next couple of days, I’ll be presenting you how to run a successful company through different part of my (extensive) tutorial. Today, I’ll publish my second part : the financing of your company. If you didn’t read the first part, read it. You will find it here :
- PART 1 : The organization
*In english (published in UK)
*In Portuguese (published in Brazil and Portugal)
* Turkish (on his way)
- PART 2 : The financing
-In English (published in the USA)
-portuguese (Published in Portugal)
- PART 3 : The projections
-In English (published in Canada)
- PART 4 : The company
-In English (published in Australia)
- PART 5 : Starting up the company
- In English
- PART 6 : How to sell your products and dividends
- In English
If you want to translate this tutorial in another language, please PM me.
Part 7 : When to close your company and important things to keep track of
If you followed all the parts of my tutorial you now should have a well running company. This will normally last a while, but sometimes the situation can change and you may consider closing your company. This isn’t an easy decision because you will have to start back from scratch if you decide to start it up again. So let’s take a look today at what may cause you to close your company.
After that, we will take a look at the important things to keep track of when your company is running. Things that will allow you to get the best profit out of your money.
1 – When to close down
A – Your products aren’t selling and you can’t pay a license
There can be several reasons why products aren’t selling, the first one is that you are too expensive compared to the market. This means that you have competitors that sell the same goods at a lower price. The best you can do than is to lower your price in order to be first and then wait until you sell. If you still don’t, you will have another problem.
It can very well be that you are the cheapest on the market but that your products aren’t selling. In this case you will have a very big problem because the market isn’t interested in your products. This can be the case if you try to sell guns in a country not involved in a war (or training war). You will keep producing at loss, whatever the price (or you have to hope to be the lowest internationally to sell your products). Your only solution will be an export license to a country with low import tax barriers. You will probably manage to sell your products there and still make money.
If you can’t pay an export license the best you can do is close down.
B– When you lose money on each product you sell
As we will see further, it is very important to constantly keep track of your profit margin. From the moment you start to lose money you will have to react. Normally this will not be the case at the beginning, except if you make a mistake in the calculations, but through time a market can change (for example with V2 a lot of things will change).
First thing you can do is talk with your employees about lower wages or pay through donation. This might help you, but if they don’t accept you will keep losing money or working with a too small amount of employees.
The second thing you can try is buy a license to another country with a higher sell price.
If none if this works, you can better close your company.
C – If you want to start up another company
Companies can be seen as an investment, they give you a certain profit and can be sold again. Buying a company and making it run can be the first step towards the opening of a new company. So never be afraid to close your company and sell it again if you see that you need the money. Most of the time you will manage to sell it back at a higher price (or at the same price but you will have had the dividends in the meanwhile). You can then use that money to open another company.
Opening another company is also an option if you see that you have a to small profit margin. Having a 5% profit margin isn’t that much when you can find companies at Q1 that have a 20% profit margin. Changing from industry to take advantage of this difference is a good idea.
D – A to big stock
It can happen that your company just produces too much for your market and that you manage to sell most of your products but not all of them. If this situation goes on for a while, you can find yourself with a huge stock of unsold products in your stock that keeps rising and rising. You will need to get rid of that stock through one way or the other.
First you can try to black market to sell it, most of the time you will only have a small profit doing this, but it is better than nothing.
Second you can buy an export license (this is indeed the solution to a lot of problems).
Third, you can close your company by firing everyone (EXCEPT DEAD EMPLOYEES !) or firing the high skilled and hiring low skilled instead that will produce less. This situation can go on until you sold your whole stock and then you can start your company again at a 100%.
E – World changes
We are currently at war and things change quickly, regions are swapped, your company may change country, etc… Most of the time I say this is an opportunity, especially if you own a RAW company. When your company changes country, you will be able to buy an export license to that country for a price of 5 gold instead of 20. This license will remain after the end of the war and will allow you to sell your products there.
This is a very cheap way to find new export markets. But of course this can also be different, like we saw with the takeover of Liaoning by Russia. This had as effect that all Chinese iron mines swapped to Russia, causing a huge hike in wages over there. This will prevent you from making money until the region swaps again (or with a little luck
In such a case, don’t sell your company again. Keep it and wait, a lot of people will try to do it and you will lose money by selling it again. Most of the time, countries will not allow that they lose regions for a long time and will try to get it back by all means pretty quickly.
2 – Important things to keep track of
A – The wellness
As already said, you will need to monitor the wellness of your employees closely offering them help if the wellness is too low. If you don’t track it, you may have 2 or 3 of your employees working at 30-40 wellness and they will cost you a lot of money.
B – The wages
Regularly look at the wages on the job market, most workers don’t check them often and are underpaid, but you need to know when it changes ! Sometimes wages can drop sharply (like land in China and in overall in the eUK) and you will be able to lower the wages without your workers leaving if you send them a PM to explain. You will need to react quickly if the wages rise again, but in the meanwhile you will be able to earn more money than expected.
C – The other opportunities
Opportunities come and go, you need to keep track of them if one day you plan to switch industries or open another business. It is also important to keep track of them because they are your competitors on the job market.
For example, in every country where there a iron mines, you can hardly make another raw as iron companies can set very high wages and still make money where you will lose a lot.
D – Total earnings
Always keep track of the amount of money you maid and paid out to your shareholders or to yourself. This can be very interesting to see the ROI you had in your company. This part is essential for the shareholders also because it will determine if they get dividends or not.
3 – How to set up a good contract
Setting up a good contract is not that hard, the best you can do is follow an example that you can find on the official forum.
The official rules are :
RULES CONCERNING CONTRACTS
1. Each forum discussion in this category represents a contract agreed by 2 or more eRepublik citizens;
2. The contracts can be signed only by citizens representing themselves or, if it is the case, representing an organization, party, company, newspaper or country(if elected president);
3. A contract is not valid in the following cases:
3.1 A contract is not valid if its terms break the eRepublik Rules;
3.2 A contract is not valid if the damages requested overcome the initial contract object value plus another 50%.
3.3 A contract is not valid if it is not signed properly. A contract is considered valid if the citizens that agreed its terms post the phrase: "I agree with the contract terms" and the full text of the contract;
4. A contract must include at least this information:
- the names of the citizens that are agreeing to the contract (and the organizations that they represent, if applicable);
- the terms agreed;
- the time validity;
- what penalties should be enforced by the Admin in case the contract is broken by one of the entities;
- what happens in case one of the parties involved modifies parts of the contract or a signature by modifying the comments in the contract topic;
- what happens in case one of the parties involved receives a permanent ban/dies or parts or all the properties of that entity is impounded by Admin;
5. A contract ends if:
- it reaches its time limit;
- one of the entities breaks the contract without the consent of the other party;
- all citizens that signed the contract will post in the same discussion the phrase: "I want to close this contract";
6. If one of the entities that signed the agreement considers the other party in breach of contract, the citizen can request a trial. The cost of a trial is 5 gold and must be paid by the entity that asks the trial.
Trials
To ask for a trial a citizen must:
1. Post in the original contract discussion the phrase "I want to start a Trial against $entity. I agree that 5 Gold is removed from my account as Trial costs." - where "$entity" will be replaced with the name of the entity that is accused of contract breaching.
2. Message the Admins: Send a message through "Contact", department "Game Support". Notify the Admins that you are asking for a trial and provide the URL of the contract.
Note: In either of these messages, the citizen can provide any additional information to the Admin about why/how the contract was broken, estimation of damages, etc.
The Admin will act as a judge in the case. The judge will:
1. Analyze if the contract is valid according to the stated contract guidelines;
2. Determine what payments or punishments should be distributed. The trial cost will be paid by the party that asked for the trial;
3. Announce his/her decision in the thread and respond to the ticket sent by the person that called the trial.
If the judge concludes that the contract has not respected the guidelines, it will be canceled without removing any gold.
Note: We will delete comments which are not signatures, contracts modifications, or updates. We kindly ask that, for contracts that involve companies or organizations, to provide the link to those entities in the text of the contract or in a comment (for companies created or bought after the contract signing).
Best you can do is always take an example, check if it follows the rules and then adapt it to what you need. Try to find government contracts as they are most of the time valid.
4 – Conclusion
I guess this ends my tutorial about how to start a profitable company. I hope a lot of you enjoyed reading it and subbed to my newspaper. I know that V2 will come out soon, but I believe that I gave you the keys to your own success. The ideas I developed are global enough to be still valid (or I hope so).
In the next weeks until V2 comes out, I’ll try to speculate a little, developing ideas about how you can survive in V2, the biggest changes, the impacts etc… So stay tuned for that, and as soon that V2 is out I will try to lead you through it !
During the next couple of days, I’ll be presenting you how to run a successful company through different part of my (extensive) tutorial. Today, I’ll publish my second part : the financing of your company. If you didn’t read the first part, read it. You will find it here :
- PART 1 : The organization
*In english (published in UK)
*In Portuguese (published in Brazil and Portugal)
* Turkish (on his way)
- PART 2 : The financing
-In English (published in the USA)
-portuguese (Published in Portugal)
- PART 3 : The projections
-In English (published in Canada)
- PART 4 : The company
-In English (published in Australia)
- PART 5 : Starting up the company
- In English
- PART 6 : How to sell your products and dividends
- In English
If you want to translate this tutorial in another language, please PM me.
Part 7 : When to close your company and important things to keep track of
If you followed all the parts of my tutorial you now should have a well running company. This will normally last a while, but sometimes the situation can change and you may consider closing your company. This isn’t an easy decision because you will have to start back from scratch if you decide to start it up again. So let’s take a look today at what may cause you to close your company.
After that, we will take a look at the important things to keep track of when your company is running. Things that will allow you to get the best profit out of your money.
1 – When to close down
A – Your products aren’t selling and you can’t pay a license
There can be several reasons why products aren’t selling, the first one is that you are too expensive compared to the market. This means that you have competitors that sell the same goods at a lower price. The best you can do than is to lower your price in order to be first and then wait until you sell. If you still don’t, you will have another problem.
It can very well be that you are the cheapest on the market but that your products aren’t selling. In this case you will have a very big problem because the market isn’t interested in your products. This can be the case if you try to sell guns in a country not involved in a war (or training war). You will keep producing at loss, whatever the price (or you have to hope to be the lowest internationally to sell your products). Your only solution will be an export license to a country with low import tax barriers. You will probably manage to sell your products there and still make money.
If you can’t pay an export license the best you can do is close down.
B– When you lose money on each product you sell
As we will see further, it is very important to constantly keep track of your profit margin. From the moment you start to lose money you will have to react. Normally this will not be the case at the beginning, except if you make a mistake in the calculations, but through time a market can change (for example with V2 a lot of things will change).
First thing you can do is talk with your employees about lower wages or pay through donation. This might help you, but if they don’t accept you will keep losing money or working with a too small amount of employees.
The second thing you can try is buy a license to another country with a higher sell price.
If none if this works, you can better close your company.
C – If you want to start up another company
Companies can be seen as an investment, they give you a certain profit and can be sold again. Buying a company and making it run can be the first step towards the opening of a new company. So never be afraid to close your company and sell it again if you see that you need the money. Most of the time you will manage to sell it back at a higher price (or at the same price but you will have had the dividends in the meanwhile). You can then use that money to open another company.
Opening another company is also an option if you see that you have a to small profit margin. Having a 5% profit margin isn’t that much when you can find companies at Q1 that have a 20% profit margin. Changing from industry to take advantage of this difference is a good idea.
D – A to big stock
It can happen that your company just produces too much for your market and that you manage to sell most of your products but not all of them. If this situation goes on for a while, you can find yourself with a huge stock of unsold products in your stock that keeps rising and rising. You will need to get rid of that stock through one way or the other.
First you can try to black market to sell it, most of the time you will only have a small profit doing this, but it is better than nothing.
Second you can buy an export license (this is indeed the solution to a lot of problems).
Third, you can close your company by firing everyone (EXCEPT DEAD EMPLOYEES !) or firing the high skilled and hiring low skilled instead that will produce less. This situation can go on until you sold your whole stock and then you can start your company again at a 100%.
E – World changes
We are currently at war and things change quickly, regions are swapped, your company may change country, etc… Most of the time I say this is an opportunity, especially if you own a RAW company. When your company changes country, you will be able to buy an export license to that country for a price of 5 gold instead of 20. This license will remain after the end of the war and will allow you to sell your products there.
This is a very cheap way to find new export markets. But of course this can also be different, like we saw with the takeover of Liaoning by Russia. This had as effect that all Chinese iron mines swapped to Russia, causing a huge hike in wages over there. This will prevent you from making money until the region swaps again (or with a little luck
😁).
In such a case, don’t sell your company again. Keep it and wait, a lot of people will try to do it and you will lose money by selling it again. Most of the time, countries will not allow that they lose regions for a long time and will try to get it back by all means pretty quickly.
2 – Important things to keep track of
A – The wellness
As already said, you will need to monitor the wellness of your employees closely offering them help if the wellness is too low. If you don’t track it, you may have 2 or 3 of your employees working at 30-40 wellness and they will cost you a lot of money.
B – The wages
Regularly look at the wages on the job market, most workers don’t check them often and are underpaid, but you need to know when it changes ! Sometimes wages can drop sharply (like land in China and in overall in the eUK) and you will be able to lower the wages without your workers leaving if you send them a PM to explain. You will need to react quickly if the wages rise again, but in the meanwhile you will be able to earn more money than expected.
C – The other opportunities
Opportunities come and go, you need to keep track of them if one day you plan to switch industries or open another business. It is also important to keep track of them because they are your competitors on the job market.
For example, in every country where there a iron mines, you can hardly make another raw as iron companies can set very high wages and still make money where you will lose a lot.
D – Total earnings
Always keep track of the amount of money you maid and paid out to your shareholders or to yourself. This can be very interesting to see the ROI you had in your company. This part is essential for the shareholders also because it will determine if they get dividends or not.
3 – How to set up a good contract
Setting up a good contract is not that hard, the best you can do is follow an example that you can find on the official forum.
The official rules are :
RULES CONCERNING CONTRACTS
1. Each forum discussion in this category represents a contract agreed by 2 or more eRepublik citizens;
2. The contracts can be signed only by citizens representing themselves or, if it is the case, representing an organization, party, company, newspaper or country(if elected president);
3. A contract is not valid in the following cases:
3.1 A contract is not valid if its terms break the eRepublik Rules;
3.2 A contract is not valid if the damages requested overcome the initial contract object value plus another 50%.
3.3 A contract is not valid if it is not signed properly. A contract is considered valid if the citizens that agreed its terms post the phrase: "I agree with the contract terms" and the full text of the contract;
4. A contract must include at least this information:
- the names of the citizens that are agreeing to the contract (and the organizations that they represent, if applicable);
- the terms agreed;
- the time validity;
- what penalties should be enforced by the Admin in case the contract is broken by one of the entities;
- what happens in case one of the parties involved modifies parts of the contract or a signature by modifying the comments in the contract topic;
- what happens in case one of the parties involved receives a permanent ban/dies or parts or all the properties of that entity is impounded by Admin;
5. A contract ends if:
- it reaches its time limit;
- one of the entities breaks the contract without the consent of the other party;
- all citizens that signed the contract will post in the same discussion the phrase: "I want to close this contract";
6. If one of the entities that signed the agreement considers the other party in breach of contract, the citizen can request a trial. The cost of a trial is 5 gold and must be paid by the entity that asks the trial.
Trials
To ask for a trial a citizen must:
1. Post in the original contract discussion the phrase "I want to start a Trial against $entity. I agree that 5 Gold is removed from my account as Trial costs." - where "$entity" will be replaced with the name of the entity that is accused of contract breaching.
2. Message the Admins: Send a message through "Contact", department "Game Support". Notify the Admins that you are asking for a trial and provide the URL of the contract.
Note: In either of these messages, the citizen can provide any additional information to the Admin about why/how the contract was broken, estimation of damages, etc.
The Admin will act as a judge in the case. The judge will:
1. Analyze if the contract is valid according to the stated contract guidelines;
2. Determine what payments or punishments should be distributed. The trial cost will be paid by the party that asked for the trial;
3. Announce his/her decision in the thread and respond to the ticket sent by the person that called the trial.
If the judge concludes that the contract has not respected the guidelines, it will be canceled without removing any gold.
Note: We will delete comments which are not signatures, contracts modifications, or updates. We kindly ask that, for contracts that involve companies or organizations, to provide the link to those entities in the text of the contract or in a comment (for companies created or bought after the contract signing).
Best you can do is always take an example, check if it follows the rules and then adapt it to what you need. Try to find government contracts as they are most of the time valid.
4 – Conclusion
I guess this ends my tutorial about how to start a profitable company. I hope a lot of you enjoyed reading it and subbed to my newspaper. I know that V2 will come out soon, but I believe that I gave you the keys to your own success. The ideas I developed are global enough to be still valid (or I hope so).
In the next weeks until V2 comes out, I’ll try to speculate a little, developing ideas about how you can survive in V2, the biggest changes, the impacts etc… So stay tuned for that, and as soon that V2 is out I will try to lead you through it !
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Comments
I must admit, you probably needed a lot of time to write all those articles. They are really great for every person who wants to start or improve their company. Keep on the good work!
pertamaxx hehe
Votes these are very good
nice mate 🙂
Nice work. Voted.
Very good....
voted + Sub
Good Work