Developing a Business Model

Guest · Post by **Guest** » 11.02.2007, 02:17

I am completely addicted to this game, When I've been able to part for while, I can't wait to get back to Kapiland and keep my production going, and expanding my enterprise. I haven't slept in days, or gotten any laundry done. I didn't even know Anna Nicole Smith died!

I am still a 'newbie' to the game, but I have spent considerable amounts of time in a short period, investigating many avenues of opportunity, and I hope to provide a little intermediate newbie wisdom to those just starting out... take some time to think about what you want to do.

Pick a product, and stick with that general idea. But before you pick, investigate what you will need to produce that product completely. Wardrobes, Leather Jackets, TV's... whatever you are going to make, investigate the markets in the stats menu, see what the supply and demand for that product is, and how much of a profit can be made in the market you plan to sell in. Don't rely on what you see in the public market place, they are not a reliable indicator of the market where your store will be, that will vary from place to place, and you really just have to look and find that information. Gas in Saudi Arabia, is not going to sell as high as in a red country, so a gas station in SA wouldn't be a great investment. I have found that a grocery in the Congo is completely useless... it was restart no. 3, I think.

In the start, don't worry about building a lot of stores or research, build your production chain, (plantations, factories, mines) and expand it first. Sell your raw products on the public market to generate revenue as you go, and invest in a power plant and well, they will be crucial to long-term growth.

On expanding, I recommend expanding your factories first, this will get your final product produced faster for the market. Steel, in particular, requires a rather large production facility, to produce a profitable base product. When you get up to about E:7 @ 70m, a red factory will produce about 1000 steel a day.

I can't stress enough, don't go crazy and build too much, pick a product and stay with it. My addiction caused me to fork over for the premium membership the first day, and after buying about 150 coins, I am finally getting the hang of it.

Good Luck!

Guest · Post by **Guest** » 11.02.2007, 05:21

sounds like ur definitly enjoying urself

Guest · Post by **Guest** » 11.02.2007, 08:28

Also keep in mind the 60/100 building cap for free/premium players.

Which is a lot. But something to consider if you want to produce everything.

Invest in more than one product. Diversify. If all you produce is steel, and the steel market collapses. Well you're screwed. If the steel market collapses and you produce steel, power and electronics, and the steel industry collapses, you've lost only 33% of your income.

When constructing a building for production or sale, build more than one. This allows expansion of your operation while only losing 50% of your revenue for the time being.

The average RL corp realizes about a 5-10% profit after all expenses are counted for (some will lose money, others will realize much much more). So a good rule of thumb is to have a daily income of 10% of your capital invested (fixed assets), I think.

Factories/mines in green. Storefronts in red. Wells in yellow. Always. You pay 3x production costs for a red factory and only get 25% gain. You also pay through the nose for expansion. Production speed is not critical to an efficient corporation. Cost cutting is. Always has been. Just take a look at Wal-Mart.

Finally. Have fun. It's a game.

Tycoon · Post by **Tycoon** » 11.02.2007, 10:08

Klasanov wrote:Also keep in mind the 60/100 building cap for free/premium players.

Which is a lot. But something to consider if you want to produce everything.

Invest in more than one product. Diversify. If all you produce is steel, and the steel market collapses. Well you're screwed. If the steel market collapses and you produce steel, power and electronics, and the steel industry collapses, you've lost only 33% of your income.

When constructing a building for production or sale, build more than one. This allows expansion of your operation while only losing 50% of your revenue for the time being.

The average RL corp realizes about a 5-10% profit after all expenses are counted for (some will lose money, others will realize much much more). So a good rule of thumb is to have a daily income of 10% of your capital invested (fixed assets), I think.

Factories/mines in green. Storefronts in red. Wells in yellow. Always. You pay 3x production costs for a red factory and only get 25% gain. You also pay through the nose for expansion. Production speed is not critical to an efficient corporation. Cost cutting is. Always has been. Just take a look at Wal-Mart.

Finally. Have fun. It's a game.

Factories and mines in green... I would not do this.
At the moment I do not have the time to compare all products. But I just compared coal as an example.

And I took values of 2000 m2, lvl Manager (you do not have to see just the beginning of the game. You have to take into consideration that later on you really have to keep in mind the restriction of your buildings. Furthermore you will soon have more money than now. Your companies will develop fast as soon as you begin to build up your branches).

So if you now take coal.

Green area: units per day: 63,217.97, costs 2,844.81
taking a sales price of 11 (which is the average on one of the german markets with a lot of managers), you make a daily profit of 692,552.86 caps.

yellow area: units per day: 105,365.85; costs: 9,482.93. Daily profit: 1,149,541.42.

I would never build up a mine in the green area. Even in the beginning. Up to the level of a manager you do not get much money if you sell it to the system and build up a new one in the yellow area. So I build them in the yellow area from the beginning on.

As I said before: I did not compare the single figures of factories. But I also build any factory (except of electronics) in the red area. In the long run, this makes much more profit!

Guest · Post by **Guest** » 11.02.2007, 10:14

why build in yellow but not green?

The production values stay the same, yellow is slightly more expensive to build and expand in, and production costs are higher.

That seems like really good profit for coal. Is that off E:2 or with expansions?

Guest · Post by **Guest** » 11.02.2007, 10:31

In all fairness Tycoon, the yellow is always best for mine and well production, it beats red or green. Why would anyone put a mine any place else?

This was my logic on the power plant in red, I figured it would pay off in production time. I have had great results from my factories in red, I may be paying too much for production or whatever, but it has been working well for me so far.

Un ze vil not bring down ze twin megavatt giants!

Guest · Post by **Guest** » 11.02.2007, 10:39

A power plant in red makes more per same size at current prices for power than for green, I think. I ran the math, i think its like 1,000 more.

But prices can go anywhere, and when that happens, the cheaper producer wins out. But if prices don't fluctuate that much then red might be better.

Tycoon · Post by **Tycoon** » 11.02.2007, 10:39

Klasanov wrote: Factories/mines in green. Storefronts in red. Wells in yellow. Always. You pay 3x production costs for a red factory and only get 25% gain. You also pay through the nose for expansion. Production speed is not critical to an efficient corporation. Cost cutting is. Always has been. Just take a look at Wal-Mart.

Finally. Have fun. It's a game.

@Halee-Burton: I just quoted Klasanov... not more... and wanted to refer to that so that newcomers think about where to build their mines and factories....

Guest · Post by **Guest** » 11.02.2007, 10:41

My bad.

I have not tested mines in green areas, however I thought that the yellow only accounted for wells.

My point on factories still stands, however. The production costs are much cheaper (3x lower) in green areas.

Tycoon · Post by **Tycoon** » 11.02.2007, 10:45

Yes they are much cheaper and I think everybody should build up his own mind about that. What's more important for me? There are as much players who build them in green due to the production costs as players who build them in red due to the output. And for me it is most important that e.g. my electronic factories have enough glass, plastic etc. from my factories, so that I do not need to buy additionally from the market. That makes my end product more expensive hence my profit decreases.

So I just wanted to show both point of views. I think it is important to take all points into consideration.

Guest · Post by **Guest** » 11.02.2007, 11:00

Tycoon wrote:So I just wanted to show both point of views. I think it is important to take very points into consideration.

On this we agree.

Guest · Post by **Guest** » 11.02.2007, 15:11

Just to clarify some confusion, here is a little copy/paste from the build menu:

===================================
Industrial Area
-high wage level
-high spending capacity
-high building and
producing fees
-research 20% faster
-companies production output is increased by 25 %

Farming Area
-low wage level
-low spending capacity
-low building and
producing fees
-resources output is increased by 25 %

Raw Material Area
-medium wages level
-low spending capacity
-medium building and
producing fees
-mines and wells output is increased by 66 %
===================================

Some of this is not clear to me, but the advantage for mines and wells of 66% in yellow areas is specific and clear to me. This is a huge advantage compared to ther areas.

What is not clear to me is whaat exactly qualifies as resource output and production ouput? My guess is that resource output is raw materials and production output would at least include all factories, but I would like some clarification on which buildings, specificaly, are covered by these bonuses.

Guest · Post by **Guest** » 11.02.2007, 15:33

When you go into the help and click on "Buildings" you will see a list of all buildings and their specific type. For the production buildings there are three types:
Factory
Mining and oil
raw material
The bonuses apply to the buildings of the corresponding type.

It may be a bit confusing that yellow is called "raw material area" but the farming area is increasing production in "raw material"-buildings.

Guest · Post by **Guest** » 11.02.2007, 20:47

industrial area has production fees 3x higher

Guest · Post by **Guest** » 12.02.2007, 01:32

MagicMagor wrote:When you go into the help and click on "Buildings" you will see a list of all buildings and their specific type. For the production buildings there are three types:
Factory
Mining and oil
raw material
The bonuses apply to the buildings of the corresponding type.

It may be a bit confusing that yellow is called "raw material area" but the farming area is increasing production in "raw material"-buildings.

So you are saying, a stone mine in the Congo might produce as well as a stone mine in Oman because it is a raw material? So, you get the 25% increase, instead of 66% increase in yellow, but the production cost is also much cheaper?