Originally posted by atpollard:
</font><blockquote>quote:</font><hr />Originally posted by Aramis:
This thread has lead me to rethink pricing... if a unit can draw a 1 year contract every two years (or equivalent), and can charge triple ongoing expenses plus combat expenditures, it can cover salaries to keep the unit together between tickets. If it's 1:3, they need to make about 4x ongoing expenses... but at that point, they had bloody well better be either better than average troops of the same costs, available sooner than training up one's own, or both.
I have no idea how mercenary pricing works, but real world companies generate a total revenue of 3 times salary only. Expenses are subtracted from revenues to generate a final profit in the neighborhood of 10 percent of total revenue. General Motors and runs closer to a 4 percent profit and specialty companies (like carbon fiber frames for racing bicycles) run closer to a 25 percent profit margin.
Obviously, I am painting with a broad brush and applying a thick coat of generalities here, but a Mercenary unit should charge no less than 3 times salaries for a ticket. Total expenses (including salaries) should be no greater than 95 percent of the ticket price for a very large unit with a long-term contract and no greater than 75 percent of the ticket price for a small specialized unit with a short term contract.
A fee of double or triple the total expenses of a ticket would probably represent a short term crisis situation where demand far exceeds supply - like the very early days of personal computers or the cost of transportation at the fall of Saigon.
All of this assumes that a Merc Company is primarily a business, run like any other business - to generate a reasonable profit for the investors. </font>[/QUOTE]The problem is that Mercenary Units are higher risk, so they will need to recapture initial investment sooner than a traditional business. Further for a Mechanized Unit, or even Motorized unit, expenses can quickly exceed 3 times salaries. (Especially when the other side has Mercs as well.)
GM doesn't plan to have their plants shot up. They certainly don't commit their assets to live fire exercises. (What someone else does with their product is another matter and GM is more than happy to have the end user commit them to getting shot up so GM can build replacements.
) So the model that 3 times salaries would be enough to generate sufficient profit and cover expenses, both expendable supplies and durable supplies, may or may not work, depending on the nature of the unit and the nature of the ticket. For a low tech light unit designed to operate on nice earth like planets, or when the Patron is providing the majority of the supplies, sure. For a more seriously equipped units designed to operate in a Vacuum or other hostile environments, or a Heavily Mechanized Unit, probably not so much.
As an example to field a Light Infantry Platoon of 36 equipped to TL12 with Combat Armor, Gauss Rifles, a handful of PGMP-12 and the Gauss Rifle equivalent of the SAW, no heavy weapons, is going to cost, depending on the ruleset, an initial expenditure of MCr1.5+ without including expendables or any transport besides LPCs (Leather Personnel Carriers or boots.
) The salary of that Platoon is typically around Cr15,400 (Plus shares) per month. If you don't replace anything or use any expendables, it would take 4 years just to recover your start up costs.
For a
Basic Load of ammo, figure 8 mags and 6 Ram Grenades, (Basic load is designed to last one long firefight.) per soldier, costs more than your typical soldier makes in a month. Give the Unit 12 PGMP-12's and everyone else Gauss Rifles and Basic load for the Platoon is 70% of the Platoon's Monthly Salary. (If everyone has Gauss Rifles then Basic Load for the Platoon is 98% of the Unit's Monthly Salary.) And we haven't lost anything, or bought food. Looking at this if the ticket pays double standard Salaries and the Patron isn't buying ammo, the unit goes in the hole for the ticket.
Depending on the expected OP Tempo of the ticket, you can expect to go through, on average, 2-5 Basic Loads of Ammo per week. (That Company Commando Mission, where it is take and hold, they will likely go through no less than 6 basic loads, in 2 days.) (Lasers are starting to look good again.
)
Based on LBB4 wages, (Which I always thought were low.) Double Standard Salaries, without ammunition supply or a major bonus don't work. In fact ammunition expenditure is likely to be double monthly wages per week.
Going back to what Bill was saying about not keeping more than a Cadre around, with normal wages that low, and the benefit of having a unit that already knows how to work together (for an example of that benefit just look how the Colt's Offense works), there is little incentive to break up the unit between assignments.
