Business Development

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Business Development

Post  Admin on Tue Feb 21, 2012 8:38 pm

The Eastern Bank assumes a business will start small and then claw its way up to become more profitable over a long time and with much care. This is somewhat at odds with the idea of super rich agents throwing money at a problem to fix it, and if Corporation has taught us anything, it is that this plan always works (for the EI).

When generating a business from scratch, with no fancy stuff like a custom HQ with lasers for defence and not much RP input from the player you can use the system below to force a business to increase in level by brute financial force.

Roll Intelligence + Business as normal to increase the level or begin a business. This is a major action and described in the Eastern Bank, page 19.
If you pass, you may increase the business level either by one (using the normal rules) or spend the amount below to increase the business level by 1 level and then be able to make another roll with a cumulative -1 penalty. If the second roll is a success you spend the amount defined by the formula below to increase the business by another level. You may then make another roll and so on until you fail a roll or do not have the money to invest.

Formula for normal business growth cost: Current level2 x 100 credits
Formula for accelerated business growth cost: Current level3 x 100 credits

This means a business can be kick started by significant investment, but that it will also cost much more to do so than growing the business slowly. The extra cost includes things like lots of extra marketing and hiring temporary staff to upgrade facilities and perform extra work.

For businesses with a more personal touch, such as Reflexion, which include a significant player investment in property, design and development I will have to look into the situation and make more tailored decisions. The above system is just for business investments that pretty much run themselves. Having said that, player interest and time spent on these businesses will almost always help improve them somehow, since agents/players are awesome.


Last edited by Admin on Mon May 04, 2015 3:58 pm; edited 2 times in total
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Returns system

Post  Admin on Sun Feb 26, 2012 1:37 am

Having read the returns system used in the Eastern Bank (page 19/20), I have decided I hate it. The business and investment returns system should not be separate things with totally different systems. Therefore I am going to mess with them as detailed below. This is a very untested system, so feedback is welcome.

Returns on investments
The returns of an investment are no longer decided on an intelligence + business roll. This is because you have no control over the returns once the investment has all ready been made. Either a market does well, or it does not. You can make a business + intelligence roll as a minor or major action to assess the market in some way, such as asking how specific companies are doing and how you predict they will do in the future. This will not affect the returns though. Instead:

Roll 1D10, add any market modifiers that apply to the investment and then consult the table below to find the return on your investment.

Investing in a sector is safer, but produces smaller returns
Investing in a company can return or lose large percentages based on the market and luck
Investing in an individual produces the largest range of returns and losses.

Returns from Business
If you own a business the returns will be calculated based on the same table as the investment system. Because you own the business you will receive +4 modifier to the calculated returns on the table (as per loyal investment, but improved). Another advantage to owning a business (or individual) is that you can improve the business returns by taking minor or major actions and you will have access to the business property and services in some form. For instance, having an office or using a company workshop.
The value of your business for the purposes of the returns on your investment are found in the Business Level Value Table below.

Modifiers
The modifiers include the figures given on page 21 of the Eastern Bank:
EI agents receive a +2 modifier to all returns rolls.
Insider Information gives +1 to +10 bonus depending on your information on the market
Share Investor Training gives +4 bonus to investments (but not your own businesses)
Knowledgeable Investment gives +2 bonus to investments you have if you have a relevant skill as your profession.

In addition to these modifiers I will provide a modifier for each business or investment in the market section of the forum each week. These will no longer be categorised by things such as "In Seoul" or "Near the HQ" and I will instead address each investment individually.

Returns Calculation Table
Total Roll Sector Business Individual
20 10% 25% 60%
19 9% 20% 55%
18 8% 18% 50%
17 7.5% 16% 45%
16 7.0% 14% 40%
15 6.5% 12% 35%
14 6.0% 10% 30%
13 5.5% 8% 25%
12 5.0% 7% 20%
11 4.5% 6% 16%
10 4.0% 5% 12%
9 3.5% 4% 8%
8 3.0% 3% 6%
7 2.5% 2% 4%
6 2.0% 1% 2%
5 1.5% 0% 0%
4 1.0% -1% -2%
3 0.5% -2% -4%
2 0% -3% -6%
1 -0.5% -4% -8%
0 -1.0% -5% -12%
-1 -1.5% -6% -16%
-2 -2.0% -7% -20%
-3 -2.5% -8% -25%
-4 -3.0% -10% -30%
-5 -3.5% -12% -35%
-6 -4.0% -14% -40%
-7 -4.5% -16% -45%
-8 -5.0% -18% -50%
-9 -5.5% -20% -55%

Business Level Value Table
Business Level Effective Investment Amount
0 1000
1 1000
2 1000
3 2000
4 4000
5 6000
6 10,000
7 15,000
8 21,000
9 29,000
10 40,000
11 52,000
12 68,000
13 84,000
14 105,000
15 130,000
16 155,000
17 185,000
18 217,000
19 255,000
20 295,000


Last edited by Admin on Mon Jul 16, 2012 9:08 pm; edited 3 times in total
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Re: Business Development

Post  TheLordHighKAJR on Sun Feb 26, 2012 10:25 am

In order to combine the business and share investment process, you might need to clarify some of the "Boosting Your Investment" modifiers on pp.20-21 of Eastern Bank, and say whether they apply to returns from business as well or only share investment returns, as Loyal Investment might arguably apply if you invest in a business you set up and run...

If most of these do not apply then it seems like it is really not worth opening a business, and it is instead far more profitable to just invest in shares. For example, with this system, if you have a business near the Oracle headquarters, with a +0 modifier for the sector/services sold, unless you roll a 10, you generally seem to get 0% return or less, once the modifiers for being near the HQ and for owning the business are factored in. This will go up or down slightly based on the business sector, but seemingly by such insignificant numbers that a business is not worth opening. If you set up the same business in Seoul as a whole (+0 mod for sector/services) even when you roll a 10 you seem to get less than 10% returns once you factor in the location modifier (+2 for Seoul) and +2% for owning the business, which means it will take 40 weeks for a level 7 business to pay off the initial investment when grown at an accelerated rate when you more or less max out the die rolls every week. If you roll a 5 for the same theoretical business (lets call it a level 7 as the numbers are nice and easy to add) you get a return of about 600 credits a week. That means that it would take 100 weeks of in game time for a level 7 business (grown at an expanded rate using the above rules) to pay off the initial investment in it if you average out the return dice rolls over the downtimes.

The high cost of setting up a business, combined with the low level of returns, the ease with which the assessts (shops) can be taken away (ie blown up like the noodle shop), the extra costs incured through business fines for breach of health/safety codes, the high wholesale cost of stock and the highly variable nature of the stock market potentially means it is far safer and a better to invest in equipment and keep a wad of money for a rainy day in order to rent out a specialist workspace as and when needed.

Do the modifiers for Seoul, and then the region around the Oracle compound stack with each other, if you have a business near the compound (as it is both within Seoul and near the compound)?

Does Share Investor training work as a modifier for working out business returns? Does the modifier for being a former EI agent work for the same purposes?

Could you update The Market thread please to show current market conditions?

How would a percentage loss in returns on the table effect a business? Would it count as negative profit and you need to put more money into the business?

Do you need to pay the 20% tax for a legal business out of these returns, or are the returns counted as a post tax return?

Do marketting campaigns effect the return modifiers for a business?

If you are the sole owner and investor in a business do you use the business column or the individual column on the table?


Last edited by TheLordHighKAJR on Sun Feb 26, 2012 11:31 am; edited 2 times in total (Reason for editing : Added more to the end of the larger paragraph)
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Re: Business Development

Post  Admin on Sun Feb 26, 2012 3:45 pm

TheLordHighKAJR wrote:In order to combine the business and share investment process, you might need to clarify some of the "Boosting Your Investment" modifiers on pp.20-21 of Eastern Bank, and say whether they apply to returns from business as well or only share investment returns, as Loyal Investment might arguably apply if you invest in a business you set up and run...

Good point. I have updated the above text with more information regarding the modifiers. The Loyal Investment modifier should indeed affect your own business.

TheLordHighKAJR wrote:If most of these do not apply then it seems like it is really not worth opening a business, and it is instead far more profitable to just invest in shares. For example, with this system, if you have a business near the Oracle headquarters, with a +0 modifier for the sector/services sold, unless you roll a 10, you generally seem to get 0% return or less, once the modifiers for being near the HQ and for owning the business are factored in. This will go up or down slightly based on the business sector, but seemingly by such insignificant numbers that a business is not worth opening. If you set up the same business in Seoul as a whole (+0 mod for sector/services) even when you roll a 10 you seem to get less than 10% returns once you factor in the location modifier (+2 for Seoul) and +2% for owning the business, which means it will take 40 weeks for a level 7 business to pay off the initial investment when grown at an accelerated rate when you more or less max out the die rolls every week. If you roll a 5 for the same theoretical business (lets call it a level 7 as the numbers are nice and easy to add) you get a return of about 600 credits a week. That means that it would take 100 weeks of in game time for a level 7 business (grown at an expanded rate using the above rules) to pay off the initial investment in it if you average out the return dice rolls over the downtimes.

If you create a business in a bad market area that you do not have modifiers for (such as it being your profession or having insider information) then it is correct that investing in the stock market should be safer. However, opening a business and having it perform well can generate much larger returns, especially with the newly clarified modifiers above. I will see how the returns are affected in the future and if I need to shift the percentages around a little as the game continues.

TheLordHighKAJR wrote:The high cost of setting up a business, combined with the low level of returns, the ease with which the assessts (shops) can be taken away (ie blown up like the noodle shop), the extra costs incured through business fines for breach of health/safety codes, the high wholesale cost of stock and the highly variable nature of the stock market potentially means it is far safer and a better to invest in equipment and keep a wad of money for a rainy day in order to rent out a specialist workspace as and when needed.

Businesses are insured, so if the property is damaged or business is affected it will result in a different modifier and possibly a week or two with reduced returns. The business itself will not be completely wiped out.

TheLordHighKAJR wrote:Do the modifiers for Seoul, and then the region around the Oracle compound stack with each other, if you have a business near the compound (as it is both within Seoul and near the compound)?

I am going to change the way the market modifiers are reported to correct this issue.

TheLordHighKAJR wrote:Does Share Investor training work as a modifier for working out business returns? Does the modifier for being a former EI agent work for the same purposes?

EI agents get their +2 bonus for all returns. The share investor only works for investing in other companies and investing in sectors.

TheLordHighKAJR wrote:Could you update The Market thread please to show current market conditions?

I will when I have had a look at the system a few more times. Possibly this evening if I feel it is workable.

TheLordHighKAJR wrote:How would a percentage loss in returns on the table effect a business? Would it count as negative profit and you need to put more money into the business?

I would like the negative returns to be paid out from your own funds, other wise the maths will get complex. Likewise, all positive returns are simply deposited into your bank account and not lumped in with the investment.

TheLordHighKAJR wrote:Do you need to pay the 20% tax for a legal business out of these returns, or are the returns counted as a post tax return?

The tax is taken care of as part of normal business operations. You do not need to worry about it.

TheLordHighKAJR wrote:Do marketting campaigns effect the return modifiers for a business?

Yes. I will handle businesses individually from now on, so these should have ore of an effect in the market area.

TheLordHighKAJR wrote:If you are the sole owner and investor in a business do you use the business column or the individual column on the table?

The business column. The individual investment column is used for investing in other individuals such as welt ball players, boxers, inventors and the like.

Thank you for the thoughtful post Phil, I think addressing these issues has improved the system a lot.
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Re: Business Development

Post  TheLordHighKAJR on Sun Feb 26, 2012 4:24 pm

Thanks for the info. Sorry if the post was a bit long, but I tried to work out the business returns this morning using the new system and found I had a few questions as it was almost impossible to even break even or recoup the costs of set up.

Though I think the biggest concern, and I realised it after the last post, was the impact of growing the business quickly on the returns from it. If you grow a business at one level a week using the (current level squared X 100 credits), it costs 10,100credits to get a level 7 business and you can cover start up costs fairly easily, but as soon as you try to grow it faster, say in a week to open a large store from scratch, the accelerated formula of (current level cubed X 100 credits) gives a total of 45,100 credits.

This means it is never worth accelerating the growth of a business, even though the Eastern Bank book equates business level with the size and type of the store, and you need a high level business in order to open a larger store/in a nicer part of the city, as the business will only start to cover the accelerated set up cost if you roll fairly well over almost a year of play time.
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Re: Business Development

Post  Admin on Sun Feb 26, 2012 4:30 pm

The extra cost is considerable for high level businesses. The reason for this is because of the very large amount of time that you save. If you wish to raise a business up the traditional, slow way you must expend a large number of major actions, which can instead be spent doing much more profitable things. The question then becomes how valuable is your time?
I will look into this as the system develops. For instance I may introduce a training to make growing your business a minor action, or something along those lines to make growing a business much faster.
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Re: Business Development

Post  TheLordHighKAJR on Sun Feb 26, 2012 5:06 pm

I understand the amount of time and major actions that are being saved growing the business quickly, but the financial cost in game gets to the stage that the business will only start to give a return after almost a year in game and that is with rolling at average or better, and for a business level listed as an old city shop, which the Eastern Bank book seems to hint at is very run down and basic due to its' location in the Old City slums.

To limit the rapid expansion of the business, would it perhaps be better to keep the costs the same but to increase the cummulative -1 modifier to -2 or even -3? Or have certain cut offs, so that say it is a -1 penalty up to business level 10, -2 penalty from business level 11-20, and then -3 from 21-30 etc. This means that there is a limit on how quickly the business can be grown each down time which increases as the size of the business gets larger, but it still means that the business will be able to cover the startup costs and start providing some profit after a couple of months compared to a year. So the larger a business the more actions will need to be spent increasing its' level, and it means that low level business won't be prohibitively expensive to increase from the size of a market stall to a shop in a fairly short period of time.
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Re: Business Development

Post  Admin on Fri Mar 09, 2012 2:15 pm

Updated 09/03/12:
- Added new investment/business level equivalents to the table.
- Changed the returns modifier for owning a business to +4 (from +2) to reflect business returns being more reliable for your own companies since it is almost like drawing a salary.

These changes will take effect in week 9, not for calculations done for returns from Week 8

I will also be looking at the business rapid growth and natural growth systems soon. Please hold off on making major investments until I've gone over them.
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Re: Business Development

Post  Admin on Sun Mar 18, 2012 6:28 pm

Natural business growth
From now on, if your returns roll comes up as 10, you have the opportunity to spend the money to raise your business another level, as was previously happening in the normal business growth system. This is for future rolls (Returns from week 10+), do not apply this retroactively.
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