Hi friends. As many of you have heard, I'm quitting this game and offered to spill everything I learned about companies over the last few years. Most of you who stumble on this thread will have likely already read the Companies wiki page or the Director's Handbook and might have found them... slightly lacking. Well, I'm here to try to fill in some gaps in the community's knowledge on companies.
I learned most of this by running companies for months with secretaries to learn how roles interact with one another and ultimately affect employee income. I've talked to many directors as well and helped some of them out... For those elite directors who are about to lose some competitive advantage, I do feel a little sorry. Just a little. I'm tailoring this discussion towards TV stations, but I know many of these principles apply to others as well. I won't bother going into the basic things that you can find on the wiki... This is intended to be an advanced but not comprehensive guide. I'd like to add the caveat that I am only presenting my understanding of how companies work. I could be wrong on some things here.
Essential Positions: Extremely Important!
First, you need to understand which employee positions are essential. When you hover over the Sales Executive (SE) for a TV station, you see the phrase "Without them, the company will not make a profit". Similarly, the Ticket Agent at a Cruise Line says "Without them, the company will not be able to make money". I don't know if every type of company has roles such as these, but for these two company types, these roles are so so so important. When you read that description, you may think "easy... I'll just get one of these and fill up the rest of the company with higher earning roles". No, no, no. Think like a Torn programmer here. Would a programmer write a script of the form "if there is an SE, then this company earns money"? The answer is no, and the actual equation here is simpler in form but depends on a lot of things.
Through a LOT of trial and error, I learned that the effectiveness of a TV station's SE's determines how much income each other role, such as the Producer, makes. You can think of it like this:
Producer Income = (Many other things)*(The combined effectiveness of all SEs)*(The effectiveness of the Producer)
Similarly for someone like the deckhand at a CL:
Deckhand income = (Many other things)*(The combined effectiveness of all TAs)*(The effectiveness of the Deckhand)
Many, many directors have no clue about this effect. I had a well known director tell me that the main reason for the income difference between companies with high stat employees and the same advertising budget is "random number generation"-- that some companies were simply born with a better chance of making money. That is incorrect. Instead, the SEs' drug usage, stats, or activity are most often the root cause of poor company performance. Make sure employees in these roles have high stats, are active, and aren't addicted to drugs.
You might think... Great, I'll just hire 6 SEs for my TV station, then! Well, no, that doesn't quite work either. That brings us to our next topic.
Number of Employees at Each Role
Assume that you have one employee in one role and his or her contribution to the company income is x. If you hire a second employee into that same role, both will have their income reduced by a certain fraction. From my testing, it might be around 0.85x or 0.9x each, meaning two SEs get you 1.7x-1.8x total. With three SEs, each has their income contribution reduced further. Each might produce around 0.7x, giving 2.1x total. At a certain point, adding more of a role actually decreases the total income contribution from all the combined employees in a given role. For example, I'd expect 5 producers to make you more money than 6 producers. Note that I'm uncertain on the exact fractions here, and it may be possible that these fractional differences change with different roles. With sales executives, I routinely saw marginal benefit to the company as whole when I had 3 instead of 4, but 4 was close enough that I'd say it warrants further testing. This puts our producer equation at:
Producer Income = (Many other things)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Role Variation
You have probably seen that some roles are just terrible. I'm looking at you, Attorney. There is clearly a fundamental "role factor" which is part of each role's income calculation:
Producer Income = (Many other things)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Pricing and Company Loyalty
Oh boy, this one's a doozy. We can test that at a certain point lower prices get us more customers but lower income. However with lower prices you gain this mysterious thing called "company loyalty". Company loyalty a hidden stat. It's how some 9+ year old TV stations can run optimally charging 120k+ per contract (daily income / daily customers) to get to the top spots, but new TVs see their income tank at 100k. We know from other posts that company loyalty is gained slowly over time, starting with low prices. I suppose if you want a top, completely optimal company some day, start your price below the RRP and slowly increase. With all your company-related educations completed, you should be able to start somewhat above RRP. And how slowly should you increase the price? I'm not sure on this one. Based on the age of these top TVs, I was guessing you could conservatively increase $99 per week for TVs and not run into trouble, but I really have no idea here. This takes months/years to test properly. Better yet, buy an old company that you suspect has high customer loyalty.
Producer Income = (Many other things)*(Contract price)*(Company loyalty factor, which is a function of price)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Advertising, Marketers, and TGP
We all should know how advertising works by now. It's not how much advertising you have that matters, it's what rank you are of all others who are advertising. Since that's the case... why do so many people set their advertising budget to exactly $1,000,000? Why not $1,000,001? Think about what others are doing here, or better, test/ask around to see where there are clusters of advertising budgets and go just above it.
TGP will modify your advertising budget in a fixed way (likely some multiplication factor... 1.5x? 2.5x?), and Marketers will modify your advertising budget in a way that depends on their effectiveness for that day. From my brief testing I would guess a standard 5* marketer would get you somewhere around 1.3x-1.8x your marketing budget, with multiple marketers having lesser effects via the same mechanism above.
Producer Income = (Many other things)*(Advertising rank factor)*(Contract price)*(Company loyalty factor, which is a function of price)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
I learned most of this by running companies for months with secretaries to learn how roles interact with one another and ultimately affect employee income. I've talked to many directors as well and helped some of them out... For those elite directors who are about to lose some competitive advantage, I do feel a little sorry. Just a little. I'm tailoring this discussion towards TV stations, but I know many of these principles apply to others as well. I won't bother going into the basic things that you can find on the wiki... This is intended to be an advanced but not comprehensive guide. I'd like to add the caveat that I am only presenting my understanding of how companies work. I could be wrong on some things here.
Essential Positions: Extremely Important!
First, you need to understand which employee positions are essential. When you hover over the Sales Executive (SE) for a TV station, you see the phrase "Without them, the company will not make a profit". Similarly, the Ticket Agent at a Cruise Line says "Without them, the company will not be able to make money". I don't know if every type of company has roles such as these, but for these two company types, these roles are so so so important. When you read that description, you may think "easy... I'll just get one of these and fill up the rest of the company with higher earning roles". No, no, no. Think like a Torn programmer here. Would a programmer write a script of the form "if there is an SE, then this company earns money"? The answer is no, and the actual equation here is simpler in form but depends on a lot of things.
Through a LOT of trial and error, I learned that the effectiveness of a TV station's SE's determines how much income each other role, such as the Producer, makes. You can think of it like this:
Producer Income = (Many other things)*(The combined effectiveness of all SEs)*(The effectiveness of the Producer)
Similarly for someone like the deckhand at a CL:
Deckhand income = (Many other things)*(The combined effectiveness of all TAs)*(The effectiveness of the Deckhand)
Many, many directors have no clue about this effect. I had a well known director tell me that the main reason for the income difference between companies with high stat employees and the same advertising budget is "random number generation"-- that some companies were simply born with a better chance of making money. That is incorrect. Instead, the SEs' drug usage, stats, or activity are most often the root cause of poor company performance. Make sure employees in these roles have high stats, are active, and aren't addicted to drugs.
You might think... Great, I'll just hire 6 SEs for my TV station, then! Well, no, that doesn't quite work either. That brings us to our next topic.
Number of Employees at Each Role
Assume that you have one employee in one role and his or her contribution to the company income is x. If you hire a second employee into that same role, both will have their income reduced by a certain fraction. From my testing, it might be around 0.85x or 0.9x each, meaning two SEs get you 1.7x-1.8x total. With three SEs, each has their income contribution reduced further. Each might produce around 0.7x, giving 2.1x total. At a certain point, adding more of a role actually decreases the total income contribution from all the combined employees in a given role. For example, I'd expect 5 producers to make you more money than 6 producers. Note that I'm uncertain on the exact fractions here, and it may be possible that these fractional differences change with different roles. With sales executives, I routinely saw marginal benefit to the company as whole when I had 3 instead of 4, but 4 was close enough that I'd say it warrants further testing. This puts our producer equation at:
Producer Income = (Many other things)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Role Variation
You have probably seen that some roles are just terrible. I'm looking at you, Attorney. There is clearly a fundamental "role factor" which is part of each role's income calculation:
Producer Income = (Many other things)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Pricing and Company Loyalty
Oh boy, this one's a doozy. We can test that at a certain point lower prices get us more customers but lower income. However with lower prices you gain this mysterious thing called "company loyalty". Company loyalty a hidden stat. It's how some 9+ year old TV stations can run optimally charging 120k+ per contract (daily income / daily customers) to get to the top spots, but new TVs see their income tank at 100k. We know from other posts that company loyalty is gained slowly over time, starting with low prices. I suppose if you want a top, completely optimal company some day, start your price below the RRP and slowly increase. With all your company-related educations completed, you should be able to start somewhat above RRP. And how slowly should you increase the price? I'm not sure on this one. Based on the age of these top TVs, I was guessing you could conservatively increase $99 per week for TVs and not run into trouble, but I really have no idea here. This takes months/years to test properly. Better yet, buy an old company that you suspect has high customer loyalty.
Producer Income = (Many other things)*(Contract price)*(Company loyalty factor, which is a function of price)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)
Advertising, Marketers, and TGP
We all should know how advertising works by now. It's not how much advertising you have that matters, it's what rank you are of all others who are advertising. Since that's the case... why do so many people set their advertising budget to exactly $1,000,000? Why not $1,000,001? Think about what others are doing here, or better, test/ask around to see where there are clusters of advertising budgets and go just above it.
TGP will modify your advertising budget in a fixed way (likely some multiplication factor... 1.5x? 2.5x?), and Marketers will modify your advertising budget in a way that depends on their effectiveness for that day. From my brief testing I would guess a standard 5* marketer would get you somewhere around 1.3x-1.8x your marketing budget, with multiple marketers having lesser effects via the same mechanism above.
Producer Income = (Many other things)*(Advertising rank factor)*(Contract price)*(Company loyalty factor, which is a function of price)*(Producer role factor)*(Fraction accounting for # of SEs)*(The combined effectiveness of all SEs)*(Fraction accounting for # of Producers)*(The effectiveness of the Producer)