College of Gaming: Entrepreneur (part 2)

The Fantasy Business Sim.

This is a continuation from Part 1 of the Fantasy Business Sim.

Cash and Gold

The lifeblood of your kingdom or business is money. Whether it's real world bank notes or in game gold, this is what keeps everything running. Without gold you won't be able to build anything or hire new heroes. Without cash, you will be in big trouble with your debtors and your daily business will grind to a halt.

Where do you gain gold in Majesty? Well, each house, marketplace and your palace generates money over time. Destroying monster and their lairs will allow heroes to gain gold which they can then spend on items. A tax collector needs to go over these buildings to actually allow you access to the gold.

Cash Flow

The most important thing in any business is cash flow. Majesty does a good way of showing that. You can see as you click the houses and marketplaces the amount of gold that gets generated. So basically, if you add all that +XXX, that is the amount of income you receive in a day. So let's do a simple example, you have 2 houses which provide +10 gold, a market place that gives +250 gold and your palace which gives +100 gold. So if you add all those up you get an income of 370 gold a day. However, like in real business, this is merely an accounts receivable. This is not real cash on hand. Your market place may have a thousand gold in it's coffers but that's all just accounts receivable unless a tax collector goes up there and takes the gold back to your treasure room.

In business, receivables collection is a very important concept. One wants the fastest receivable turnaround as possible. You'd rather have real cash rather than a number that says you made a profit. It's like in stock investing where they say there's a paper gain or loss. Your stock value may have increased or decreased but if you haven't cashed it out, there is no real gain or loss yet. However, one must note that when the value of something is going towards zero, it is important you cash out as soon as possible.

Let me give an example in Majesty, where the value of something goes toward zero. Your marketplace with 1000 gold in it's storage is besieged by a horde of rat men and zombies. The life of your marketplace rapidly decreases and you have no heroes or guards to defend it. So do you waste your potential 1000 gold? Well, if you have a thieves guild and can use their ability to instantly collect taxes, then good for you.

Time Value of Money

The thieves guild ability provides a quick cash flow at the cost of collecting less gold. This guild shows the time value of money. Money you receive now is worth more than what you get later. When you get gold, you can immediately upgrade you marketplace or train more heroes to aid in the defense of your kingdom. Certainly having more money later at the cost of time is fine at the start but when the kingdom enters crisis mode, you better have a lot of cash ready to spend.

More business ideas and Majesty strategy to come in part 3 of this College of Gaming series