Tutorial : How to start a profitable business - Part 2

Day 804, 00:55 • Published in USA United Kingdom • 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
- portuguese[portugal] translation

If you want to translate this tutorial in another language, please PM me.

PART 2 : THE FINANCING



Now, the second part, as important as the first one now you understand the financial needs you will have to start up your company. We are today going to answer the second question : Where can I find the money to start up my company? And is it interesting to find some more?

1 – Your own money



First, we are going to discuss financing your organization through your own money. This will be the most easy way, and the way most players will finance it. Why? Because you don’t have to repay a loan, discuss with a partner. Those two other options will be discussed later.

A lot of you will have seen that your own capital doesn’t rise very fast, especially through the first levels of the game. No worry about that, this is normal. Financing 50 gold alone isn’t an easy operation and will require some time. Time will be the most determining factor : how longer you wait, how more you will have, the higher quality of company you will be able to buy.

What most new players don’t know is that there are several ways to speed up this process. I am not going to write a whole article about it, as several other players already wrote them and a simple copy past would be disrespectful. So, here are some useful links that you should definitely check out to know how to make more money :

* How to make money
* Make 7 gold in 1 hour (depending on the country you can make more or less money)
* How to save money
* [url=For those who didn't vote yet, please do : http://tiny.cc/Tutorial2598]The ABC of Getting rich[/url]

Those articles are all three well written and accurate, you definitely need to check them out before going on. Even if the following options seem interesting, the most capital you can invest on your own : the better. If you have a high capital on your own, you will be able to take a smaller loan or a bigger part in profits. And, the ways that are explained above are very easy…

2 – Business partners



Starting a company on your own is a hard thing, especially through the lack of funds, one way to skip this part is to make a partnership with someone you know. Both of you will invest capital and get dividends, both of you will be able to manage the company and, by this, split the amount of work. It will also allow you to raise a certain amount twice as fast.

Having two owners of a company has several big advantages, like if you go on vacation, your company doesn’t have to shut down. Most of the time, both of you will not leave at the same time allowing to keep making money in the meanwhile. Also, two opinions about a situation are always better than a single one. Having two persons forces you to communicate and think about the proposal you are making. You have to convince the other, and most of the time, during the reflection you will see several new elements appear. Those new elements will allow you to react better to a situation.

But to this there are several disadvantages :

A – You need to find someone you can trust. Not everyone you find on the internet is trustable and some of you may steal your money if you invest with them. It is possible to ensure this more or less with a contract (I’ll make a part about that later), but if you feel you need it : you better don’t make a partnership with this person. The best way to find a good one, is to be active on IRC and on the forum. This way you will learn to know people and if you ask them they might be interested.

B – you have to find a way to split the money equally. If one of you manages the company and invests more, you have to find a fair way to split up the money. Comparing the capital is easy but not the amount of time. Some of your partners may not care about the time they invest, but some will and might become whiny.

To reassure you, I am in a business partnership and I made a very good friend through it. It is also the perfect way to learn to know each other as you will have a lot of contacts. Both of you will need to discuss every action you undertake, which often turns out to be good as two persons will often make less mistakes than a single one. Having such a person at the end is also an advantage for you, as it will encourage you to keep playing in rough times. Sometimes it will be hard to keep playing every single day, those persons can help you.

To get back to our topic, how can you find the perfect business partner?

1 – Ask your IRL (in real life) friends that play on eRepublik if they might be interested. These are people you can trust, which is essential.

2 – Ask on the national forum, most of the people active there are trustable. Why? Because they are part of the community and people will know if they don’t behave correctly. A lot of countries will not allow one of their member to scam someone and will probably ban him if you have proof of the scam. This is a very effective way to ensure that bad things don’t happen.

3 – Use a matchmaker service, I know Buck Rogers started one a while ago that you can find at this address : http://tinyurl.com/ntn5zl , but I don’t know if it is still running. I hope it does because it is an easy way to find someone.

3 - Shares



A variant on the business partnership are the shares, this is slightly more complicated but can allow you to raise a lot of money very quickly. It will go like the systems we have IRL , I’m going to make a quick draft about how you can set this up.

First, you need to know what you need as a startup capital, let’s say 130 gold for a Q3 company. You divide this by a certain amount of shares, let’s pick 130, which makes 1 gold a share. If you manage to sell them all, you will be able to start up your company. Most of the time you will have to present to them a business plan with precise calculation about expected profits, etc… You need those even if you set up your own business so it is not a waste of time.

When your company is running, you will earn a certain amount of money every week. As a Q3 company let’s says 5 gold a week. As you have 130 shares, you will have to split those 5 gold into 130 and give it to the shareholders.

In theory, this is very easy as you will manage the company and you will only hear from your shareholders once in a while when they are getting a dividend. The problem with this is that the money of your shareholders is stuck in your company, if one wants out and can’t sell his shares, you will have to stop and sell your company.

It is a big risk, but the profits you may make are also slightly higher than on your own or with a business partner. If you try to set up something like this, or if you want to buy shares from a conglomerate, you will probably need to sign or setup a contract. These contracts are enforced by the admins. This way you will always have a ways to get your money back if needed. NEVER buy shares if you don’t sign a contract, and NEVER pay before having signed the contract. If the person asks you to : then it is probably a scam. Warn people about it and alert the admins.

I will make a part later on about how to set up a valid contract.

4 – A loan



Like IRL, eRepublik has banks that give out loans and have deposit accounts. They are kept by players and they are a good way to get money. You will need to reimburse your loan over time with some interests.

There are more banks than you can imagine on eRepublik, just take a look at the official forum under “contracts”, most of them are about loans and this is the best way for you to find a bank that suits you. Don’t be afraid to dig as rates can change a lot from one bank to another. Ask to at least 4 banks what their rates are and about the conditions.

Before you sign anything, don’t be afraid to ask for help on your national forum, a lot of people will help you out and reduce risks, because there are some. If your business fails and you lose a lot of money, you may risk a permanent ban from the game. Some bank do include this in the contract so you have to be very careful about this.

I digged some up, but best is that you look for it yourself as thinks can change very quickly. Banks appear and disappear everyday in the eWorld as it is a hard business.

* Cro Bank :
* Royal Bank of Romania : http://rbr-bank.weebly.com/index.html
* The Florida Commerce Bank :
http://wiki2.erepublik.com/index.php/The_Florida_Commerce_Bank/Programs
* And the most famous of all T’jelle bank : http://etjelle.info

If you know other banks, don't hesitate to post it in the comments. Banks don't have limitless ressources and people may need more links !

5 - Why should you try the last once to raise as much capital?

This is a very important question I think. We often forget that a lot of new players start a Q1 company because they hope to make money, true that most players are buying Q1 products but we can without doubt say that the offer exceeds the demand in nearly every sector if you sell Q1 products.

Making money in Q1 is thereby very difficult and will only occur in a small number of countries and markets. It is often better to start directly in Q2 and then wait until you can upgrade to Q3. For RAWS we can even say that you best start directly in Q3 as you will not or hardly make money otherwise. Some opportunities exist, but you can then best have buy a company with an export license, otherwise you will never sell.

Thereby, having a high start capital is better because you will be able to cover your mistakes. If you are already tight on cash from the start the first hit and your company will drown. The ways I presented you are perfect to raise such a “security capital” for harder times. Never be afraid to spare some gold for in case of trouble. It often happens that the market price lowers under the breakeven price. All actors of the market will lose money, but those who survive and keep producing (even if they don’t sell) will come out stronger. Why? Because some of the companies will close down. This will reduce the offer and the prices will rise again. Often, those prices will rise higher than they were before and you will make HUGE profit margins.

This can easily be demonstrated for the Q1 food in Brazil over the last two months. You can find the chart yourself at : http://ereptools.net/graph/productsPrices. In this chart you see that the prices can rise form 0,0178 gold to 0.0216 in 2-3 days !! Beïng able to survive the crash, will allow you to make money during the week that follow time that all companies start again.



So, try to consider one of the previous options to start a as high Q as possible and to build up a security capital as soon as possible. As a new player you best ask the knowledge of some older, but I am sure you will manage just fine when you finished reading this tutorial.

So thanks for reading this second part of my tutorial, vote and subscribe to stay informed about the latest parts ! And if you want to make a donation, they are always greatly appreciated (yeah had to try)