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Originally Posted by The Life and Death of a Businessman
Our demonstrative character will be named John. John has been saving his money with his friends for the past several weeks in hopes of purchasing one of Era's several businesses. Just a few hours ago, a business went up for auction when the old owner failed to pay his expenses for the second week in a row. John has the money, and purchases the business.
Hence, John's store is born. John decides that he will first sell some ammo. He has chosen to produce handgun ammo and uzi ammo. With his remaining money, he purchases licenses for each of these items, as well as enough production machines to get him started.
He places the little money he has left in the safe, and calculates the payment rates at which he will be able to hire one employee and still be competitive. This will involve looking at what his competition pays their workers. He has decided to pay $5 per iron mined, $4 per lead mined, and $3 per each handgun ammo and uzi ammo stock. He specifies a maximum he will spend for each item for the week. He hires a miner. The miner knows from checking into the business info that he will be paid $4 per lead and $5 per iron. He goes out and mines enough to fill the weekly quota, then stocks. The money which the miner earns is "reserved" in the safe; in other words, it can't be withdrawn by the owner or anyone else.
The owner also has to factor in weekly costs, including utilities (steady rate), maintenance (depending on how many production machines he has), and taxes. Using these figures, he plans out a budget. When the week is over, the workers receive their pay directly in their ATM accounts. The owner can then set his weekly maximums for each item (including stocks), as well as what he will pay for the week. This can also be set the week before for convenience.
This week, John set his caps so that he spends $10,000 in employee expenses. He pays for his utilities, maintenance, and taxes. The total cost comes out to $15,000. He only makes $10,000. He is now at -$5,000. However, he had the foresight of putting extra money in the safe in case this happened. Because of this, he still has money in the safe, and is able to set new caps for the week. He also decides to start selling a gun. He purchases a license for producing and selling the M16, and sets a cap for the M16 at $6,000. The gun costs $2,500 to produce from gun parts, therefore two can be stocked this week, assuming he has the minerals needed. He sets the stock payment at $500. This $5,000 is not reserved as it does not go to an employee, but the $1000 used for stocking is reserved. It is up to the business owner to make sure that he doesn't go in the hole for part purchases.
When the week comes to a close, he has sold two M16s, both priced at $4,000, and made $3,000. He has made $14,000 from ammo. He has now made a profit of $17,000. After paying $10,000 for his employees, he pays the $5,000 for weekly expenses, and is left with $2,000 of personal profit. He can take this out and use it himself, or leave it in as insurance.
John decides to take the money out and reward himself. He hires another employee, and raises the caps. This week, he loses money, and now has negative money in the safe. However, because the money paid to employees is reserved money, the employees are paid what they were promised. His caps can't be set higher than he can afford to pay, therefore he cannot pay his employees this week. If he has some stock left over from last week and it is purchased, he can then use this money to set a cap and mine some minerals. He can also use personal money to add to the safe. John fails to pay his expenses the next week, and is shut down. The business is automatically put up for auction.
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02-10-2010, 11:08 PM
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