Strike at what is weak, avoid what is strong! If the state can target two regions of equal value, it is wise to choose the region with the weakest defense. The trick here is in knowing what is weak and what is strong.
If the campaign is protracted, the resources of the State will not be equal to the strain. Keep military campaigns as short as possible. The longer you are at war with one faction, the less time you have to conquer regions of other factions. And the longer you have been at war, the more money you have spent on wages and salaries to detriment of the state treasury.
The skillful soldier does not raise a second levy! If you can conquer a region with one legion, then one legion will suffice and a second legion is not required.
The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy. Do not make mistakes, but wait for your opponent to make mistakes, which you can capitalize on.
It is wisest to pick an opponent who has equal or lesser training than your own gladiator. The victor of a gladiatorial battle wins the prize offered by the Aediles, because gladiators and their armour and weapons tend to be very expensive, it wise to join a fight when enough prize money is offered by the Aediles.. Health of all the combatants in a fight is decreased at random and players who join in gladiatorial fights should be aware that death of your gladiator is a possibility. Therefore, though it is possible, it is best not let to your family members become a gladiator, but instead pick a slave.
Games bestowed on a certain god or goddess may positively affect the favor of that god or goddess.
It is wisest to join a race where all the opponents have equal or lesser training than your own charioteer. Accidents are not an uncommon occurence in chariot races and charioteers may die in chariot races. The victor of a chariot race wins the prize offered by the Aediles, because joining a chariot race is a very expensive business, it wise to join a race when enough prize money is offered by the Aediles.
Games bestowed on a certain god or goddess may positively affect the favor of that god or goddess.
Do not buy goods, that you do not need! This may sound simple enough, but it is hard to predict how much exactly you need. What happens if all of the sudden, a child was born, which means that you need to buy more food? Or vice versa, what if a family member died? You have to plan ahead for these kinds of events, but because these events may be random, it is hard to predict what exactly is going to happen, and hence it is hard to predict what you need. However you may know the odds of these random events, and hence you may predict how much reserve you need to have.
Buy low and sell high! This sounds easier than it is. Use the information you have at your disposal to your advantage. If you know certain goods are rare, then you can sell them at a higher price. Vice versa if you know there is a surplus of goods, then you can often buy them cheap.
Tip: Visit a horreum, shops and markets to see how many goods there are in the city.
For some goods like bread, fruit and vegetables, there will always be a demand. Other goods like fish for instance can be substituted for meat. Hence it follows that the price for vegetables is more inelastic than the price of fish. When there is a high demand, but low supply of certain goods, inelastic goods tend to have higher prices than more elastic goods, because these elastic goods may be substituted for something else.
Keep in mind that overall prices of goods may fluctuate. Prices tend to increase when there is inflation, and decrease when there is deflation.
Prices are sticky! It tends to take time to alter prices and sometimes it may not be profitable to alter prices, especially if it concerns goods sold at a merchantile market (remember market stall fees or import duties). Prices may decrease slowly, or sometimes may not decrease at all, even when demand is decreased and supply increased, this is because there are production costs. This price stickyness is caused by costs that are known as menu costs. For example the price of a sword may be 18000 uncia. This price is determined by the smith, due to the fact that there are costs involved in the production of the sword. For example the iron that was required to produce the sword may have cost 8000 uncia and the food that was required to feed the worker may have cost 8000 uncia. Now suppose the market price of swords is 17000 uncia, then the smith may be forced to lower his price to 17000 uncia, leaving him a profit of 1000 uncia. But what if the market price is lowered to 15000 uncia?
Will the smith take a loss of 1000 uncia? This seems unlikely, so the price of the sword is likely to stick at 16000 uncia.
Tip: Remember it always takes time to adjust prices, so the trick is to buy goods that you know are too cheap, given the current prices (known as undervalued goods), because those goods are bargains to be had.
Find the path of least competition! Do not compete with your neighbours, if you do not have to. For example if you know there are many bakeries, but few mills, then it is better to open a mill instead of yet another bakery.
Tip: Visit a horreum to see how many businesses there are in the city.
If you are going to get competitors no matter what kind of shop you choose, then you still need to decide where you will place your shop, provided there are several vacant sites.
Tip: Consider a location of your shop that is close to your competitor.
Profit and continuity are the main things that keep your business alive and well! You need profit to sustain yourself, so that you are able to continue. In a market with lots of competition, the profit is held in you being able to squeeze your supplier or purchaser. However do not squeeze your supplier or purchaser out of business, because this is detrimental to you in the long run. Squeeze your suppliers and purchasers just enough.
Profit is at its highest when marginal revenue equals marginal cost!
Here is how you determine the marginal cost. Say you have 2 slaves who each can produce 3000 flour. The cost of a slave is 3000 uncia. A slave needs to be fed, so lets say the cost of feeding each slave is 8000 uncia. Now you buy a third slave for 3500 uncia, because slaves have become more rare, the price has gone up. This third slave has to be fed, because you now need to buy more food, the cost to feed that slave is 9000 uncia. Because you have an agreement with your neighbour, you can purchase millet at a price of 4 uncia per unit, no matter how much you buy.
The marginal cost is calculated as follows:
[1 slave scenario] 3000 + 8000 + (3000 * 4) = 23000 uncia
[2 slaves scenario] (3000 * 2) + (8000 * 2) + (3000 * 4 * 2) = 40000 uncia
[3 slaves scenario] (3000 * 2) + 3500 + (8000 * 2) + 9000 + (3000 * 4 * 3) = 70500 uncia
MC[0] = 23000 - 0 = 23000 uncia
MC[1] = 40000 - 23000 = 17000 uncia
MC[2] = 70500 - 40000 = 30500 uncia
Here is how you determine the marginal revenue. Say each slave you bought can produce 3000 flour. You can sell 1 sack of flour for 8 uncia.
Then the marginal revenue is calculated as follows:
[1 slave scenario] 3000 * 8 = 24000
[2 slaves scenario] 3000 * 8 * 2 = 48000
[3 slaves scenario] 3000 * 8 * 3 = 72000
MR[0] = 24000 - 0 = 24000 uncia
MR[1] = 48000 - 24000 = 24000 uncia
MR[2] = 72000 - 48000 = 24000 uncia
If we compare marginal profits in the scenarios, then we get:
[0] = 0 - 0 = 0
[1] = 24000 - 23000 = +1000
[2] = 24000 - 17000 = +7000
[3] = 24000 - 30500 = -6500
If we compare profits in the scenarios, then we get:
[0] = 0 - 0 = 0
[1] = 24000 - 23000 = +1000
[2] = 48000 - 40000 = +8000
[3] = 72000 - 70500 = +1500
As you see from the first example, we are not near the maximum profit, because marginal cost is not equal to marginal revenue. We could compare MC and MR for when there are no slaves, but then we would be out of business, because 0 slaves means 0 production and hence 0 revenue, so this does not make sense.
Despite the fact that we are not at maximum profit, we can determine the optimal profit. The marginal profit is highest at scenario 2, so naturally the profit is highest when we have 2 slaves in this example. And behold marginal revenue is equal to marginal costs when you have about 2.519 slaves (at the point where marginal profit = 0), because you can't have a half slave, that means profit is optimal in this example when you have 2 slaves.
Plan for the future!
In the previous example costs went up as we increased our production, which meant we had less profit, when the production was at its highest without running into losses. But what if we ran a business with 4 slaves at the prices of the third slave? Then our profit would be even lower at 1000 uncia.
Now suppose costs would be even higher at the 5th slave, then we might start running at a loss, and hence have a negative profit. In this example it is profitable to keep your business fairly small (2 slaves maximum).
However suppose you got a technology that allows you to produce more flour per slave, and suppose costs of feeding a slave remained stable, then the production costs would be lower. If you started to mass produce flour and dump it on the market for lower prices, then you might be able to force your competitors out of business. In such a scenario it would be better to increase production, even if it means that you would be running at loss for a while. Hence the real trick is in knowing what to do given the current circumstances, but also the future circumstances.
If you know that a short term loss is beneficial to your future profit, then it may be a good idea to take that short term loss if you can afford it. The real difficulty lies in the situation where you cannot afford the short term loss. If you cannot afford it, but you know that expansion of production is the right thing to do, then it may be wise to take a loan. There are risks involved in taking a loan, first you may be unable to repay the loan, and second the interest of the loan may be too high, for the expansion to be profitable.