Bitlife Full Guide to the Business Update

Feeling lost after the new Business Update? Don’t worry, tons of people are in the same boat! This guide will help you navigate the new system and build a thriving business.

I’ve seen many people who can’t get a good business started in the new update so I decided to put together an in-depth guide on how it all works. The business update is new and will most likely have quality of life updates soon so all this is subject to change. Also, nothing here has been officially confirmed this is just how I have had the most success starting a business. I will caps lock all important vocabulary/information so if you just need a few tips look for those.

For some added context, I’m a business student in my 3rd year. I’m in the middle of starting a business at the moment, so this update was something that I’ve been highly anticipating. Some aspects of the update surprisingly reflect the real-world management of a business. Hopefully, you can apply them to your Bitlife businesses.

This update added a cool CEO career path (but it costs money). The only free addition is a mail-order bride option, which is kind of strange. Overall, the update is a good step, but it could use some more free features to help new business owners like you! Let’s get started on building your business dream!

Starting a Business

To start a business in the new update, you need to be over 18. You have a selection of industries in which you can choose to start your business. Here is the complete list in order of the amount of investment required:

• Food Truck
• Gift Shop
• Brewery
• Health Food Store
• Novelty
• Lingerie Boutique
• Coffeehouse
• Adult Toys
• Pet Supply
• Kitchenware
• Musical Instrument
• Jewellery
• Beauty Supply
• Clothing Outlet
• Sporting Goods
• Footwear
• Distillery
• Dairy Farm
• Winery
• Consumer Electronics
• Robotics
• Pharmaceuticals
• Semiconductor
• Car Manufacturer

Right off the bat, here is my first issue about the update. It’s tough to start a business in a regular Bitzen playthrough (so, no special traits and not using God Mode to begin as a part of the Monarch). The cheapest business, the food truck, starts at $493,000. You have to spend your own money to start a business, making the barrier to entry (The factors determining how difficult it is to enter a market. Could be financial, competition, marketing, technology, etc.) almost impossible.

There are only two real ways to become a CEO. You can study Finance or Economics at university, go to Business School, get a full-time job at a company with a corporate tag, and work for over 20 years before being promoted or offered a job as CEO. Or, you can use God Mode to have your Bitzen be born as a Prince and get a considerable amount of money before abdicating your title once you turn 18-19.

I imagine that most people playing the update want to start a business as young as possible, so the only real way to start a business with substantial cash behind you is to be a part of the Monarch. The fact that you have to use a cheesy method to start a business in the more investment-heavy industries goes against the nature of the update. This extends into another issue, which is the fact that the cheapest business to start is around $493,000. The reality is that you can create a business with minimal capital requirements nowadays. I think the developers need to add industries with significantly fewer financial requirements, with the caveat that competition within these industries is very high.

My first suggestion to u/BitLifeApp is to implement loans, shares, and investors in the next update. It would make it easier for people to start a business and provide you with more avenues to add interesting random events that add more depth to the update. Loans are technically existing in the form of mortgages when buying a house. A way to implement loans to the Business Update is when a person is looking to start a Food Truck business; for example, but you’re financially limited, the game gives you the option to apply for a loan. If you accept, the game gives you a loan with the total loan amount, the annual APR, and the monthly repayments. It’s not uncommon for businesses to have a startup loan; the US has their SBA-backed loans, and the UK has their startup loans. Both are very popular options for people who want to start a business but don’t have the financial requirements to do so.

Shares or stocks are a simple concept. They quantify the ownership of a company, where one share equals fractional ownership of a business. Those who invest in stocks own a tiny fraction of the company they’re investing in every time they buy a stock. I believe InstLife had a feature where you could seek investors to invest in your company, giving you extra funds that allowed you to invest in your business. I think it would be fitting for the developers to add stocks to the game so that when you need to raise funds for your business, you can do so. You can have it so that when you decide to raise money for your business, it considers your valuation and business performance before providing a share price. Then you choose how many shares you want to give away, and the game calculates. It gives you an amount raised with the total amount of investors who invested in your company. This would be another way to make it easier for players to start a business and give the developers more opportunities to add more random events.

Running & Managing a Business

Once your business is up and running, you are given the CEO title. In my first playthrough, I started a coffeehouse called Grace & Co., where I invested $4.4 million. Ultimately, I grew the company to have a total revenue of $366 million, and a total net income of $92.8 million and sold my company for $92.7 million.

At the top of the menu for the business special careers, you have “CEO of [Insert Business Name Here]”. Underneath that is your business performance. It shows how well your company is doing as an annual report and can contribute to how much stress your Bitzen is experiencing. Every report shows your revenue, net income, profit margin, and sales. If all of them are green, your performance will be green. Additionally, your stress would be significantly less.

Suppose you’re running an existing company as CEO. In that case, the business performance will determine whether you’ll get a raise or bonus from the board of directors and decide if you should be fired or not.

Beneath that is your industry, which Grace & Co. was in the coffeehouse industry. Furthermore, it shows you the demand within the industry and the competition. If your competition is low but your demand is high, your profit margin will be very high. The inverse is true; if demand is low and competition is high, your profit margins will be low.

Below your industry are your products. Whether joining as your CEO or starting a business, you’ll have a few products to choose from. For Grace & Co., I added a whole bunch of products, which is typical for a coffeehouse since you don’t see them offering only one product. In the product screen, you have fixed cost/unit, marketing cost/unit, price/unit, and production.

Fixed cost per unit is the cost of producing a unit, which is set based on the supplier you have. I suggest searching for new high-quality suppliers with the lowest fixed cost per unit every year. It will give you the highest margin possible.

Marketing cost per unit is the cost of marketing a product per unit. In the real world, there is a diminishing return on the amount of money you put into marketing. The higher the marketing cost per unit, the less you get out of it until you eventually reach a plateau and start costing you. There’s a golden rule for how much you should spend on marketing. The US Small Business Administration recommends spending 7-8% of your gross revenue on marketing if you’re doing less than $5 million a year. Studies on the matter have concluded that 5% seems to be the sweet spot for how much you should spend on marketing, which I recommend for your marketing cost per unit.

To calculate your marketing cost per unit, use the following formula:

Production x Price/Unit = Revenue

Revenue x 5% = Marketing Cost

Marketing Cost ÷ Production = Marketing Cost/Unit

Next is the Price per Unit. This is where you set your prices. Typically, the higher your prices, the fewer people will buy, and the inverse is true. You can calculate a price per unit in two ways, profit margin or markup. Profit margin expresses how much of every dollar in sales or services is kept as earnings as a percentage. Every industry has its own profit margin, which is listed as follows:

• Food Truck: 6-9% (Matt Roberts, restaurantninjas.com, “Are Food Trucks Profitable?”)
• Gift Shop: 50% (Association of Independent Museums, “Success Guide – Successful Retailing for Small Museums”)
• Brewery: 92% on a pint (Jonas Rembert, kissmybrew.com, “Is the Microbrewery Business Profitable?”)
• Health Food Stores: 38% (New Hope Networks, newhope.com, “Market Overview: Average sales by store type, and profit and expense”)
• Novelty: 50% (Rose Clearfield, feltmagnet.com, “How to Price Homemade Craft Items: Formulas and Other Considerations”)
• Lingerie Boutique: 50% (Jim Woodruff, smallbusiness.chron.com, “How Much Would it Cost to Start a Lingerie Business?”)
• Coffeehouse: 12% (Esquires Coffee, esquirescoffee.co.uk, “How Profitable Are Coffee Shop?”)
• Adult Toys: 43% (Pat Walls, starterstory.com, “How To Start An Adult Toys Business”)
• Pet Supply: 40% (Esther Strauss, stepbystepbusiness.com, “How to Start a Pet Store Business”)
• Kitchenware: 25-35% (Founder Activity, founderactivity.com, “Profit Margin on Kitchen Appliances & How to Increase It”)
• Musical Instrument: 48.5% (Retail Owner, retailowner.com, “Musical Instruments & Supplies Stores Benchmarks”)
• Jewellery: 43-47% (Thread Curve, threadcurve.com, “What is the Profit Margin on Jewelry?”)
• Beauty Supply: 53.33% (Freelance Formulations, freelanceformulations.com, “What is the Average Profit Margin of the Cosmetic Industry?”)
• Clothing Outlet: 4-13% (Jennifer Sable, smallbusiness.chron.com, “What Is the Profit Margin for Retail Clothes?”)
• Sporting Goods: 37% (Clayton Browne, smallbusiness.chron.com, “Good Benchmark for Profit Margins for a Sporting Goods Store”)
• Footwear: 50% (Thread Curve, threadcurve.com, “What’s the Profit Margin on Shoes?”)
• Distillery: 23% (Greg Roughan, Unleashed Software, www.unleashedsoftware.com, “The Distilled Spirits Industry: Trends for 2022 and beyond”)
• Dairy Farm: 27.97% (Dr Larry F. Tranel, “Beginner Dairy Producer Heading for Millionaire Status!”)
• Winery: 28-30% (Scott Schulfer, Binwise, home.binwise.com, “Wine Industry Growth Rate And Wine Profit Margins”)
• Consumer Electronics: 57.08% (CSI Market, csimarket.com, “Consumer Electronics Industry Profitability”)
• Robotics: 40-50% (Jim Pinto, Automation, automation.com, “Price/Margin/Volume Mindset Inhibits Growth”)
• Pharmaceuticals: 76.5% (Fred D. Ledley, MD, “Profitability of Large Pharmaceutical Companies Compared With Other Large Public Companies”)
• Semiconductor: 48.72% (CSI Market, csimarket.com, “Semiconductors Industry Profitability”)
• Car Manufacturers: 7.5% (ZT Corporate, ztcorporate.com, “Determining Automotive Industries Profitability For 2021 and Beyond”)

The best way to calculate your price, use the Markup Calculator from Omni Calculator (https://www.omnicalculator.com/finance/markup). Click on Advanced Mode, which will give you the margin section. From there, add the cost and the margin, and the calculator will spit out revenue and profit. The revenue will be the price per unit you’ll use.

The second option is markup. Markup is the difference between the selling price of a good or service and its cost, often expressed as a percentage. A markup is added to the total cost incurred by the producer of a good or service to cover the costs of doing business and creating a profit. You can Google the markup percentage for each company here, but the profit margins should do you just fine.

Finally, there’s production. My rule is to start with a low production amount, typically around the 1,000 or 10,000 area depending on the business, and increase it as you go from what your analysts suggest. I tend to increase production by the fifths or tenths of a percentage from what the analysts have suggested. So, for example, the analysts would say 49%, and I’ll do 45%. If it’s 50%, I’ll do 50%.

In the Activities section, you have your business management activities. First is the balance sheet, which also shows your capital. There, it displays your facility costs, payroll costs, salary, production cost per year, and revenue per year.

Bonus allows you can take out a pre-tax compensation. On average, CEOs receive 50% of their base pay as a bonus, so that’s likely how it works here; I’m not too sure how it’s determined. Next are employees; the amount ranges from industry to industry. They will have a wide range of professionalism and competency. To increase professionalism, you can praise them or give them bonuses. To increase competency, I believe spending money on team-building activities helps to improve it. Still, most increases come from being in the company over time.

Facilities allow you to open new stores. I only recommend opening up facilities when you’re nearer to capacity. Opening multiple facilities at once can lead to overexpansion, creating significant problems for your business if the facilities aren’t used to their maximum productivity. After facilities are the Invest button, which allows you to invest more of your personal money into your business.

Payroll is where you manage your workforce and their salary. You can increase or decrease your workforce as well as their pay. Increasing your workforce allows you to increase capacity until the law of diminishing returns kicks in (where employing an additional factor of production causes a relatively minor increase in output) and you need to open up a new facility. Increasing your employee’s pay keeps your employee’s professionalism high; the inverse is also true. I approach my first few years by starting with the base number of employees and giving them a low wage. I compensate for their reduced professionalism by praising them. Once my business is growing steadily, I increase the salary to average. As the company expands, I increase the workforce to the maximum before I need to open up a new facility due to being near the production limit.

Salary allows you to configure your own annual salary. When I start a business, I usually have my CEO’s salary at $0 and take out bonuses instead when I need to. It allows the company to have the most amount of cash available to grow. Many CEOs in the real world don’t have wages; they often get their compensation from bonuses or stock options. Once your business takes off with multi-year growth, consider taking out a salary if you wish to.

Sell allows you to sell your company after a certain period. You can use the valuation button at the end of the page to sell your company appropriately. You may get lucky and sell your company at a higher price, although I haven’t personally experienced that.

Team Building allows you to sponsor a team-building exercise using company funds. I believe that sponsoring them will enable your employee’s competency to go up. The ones that are pretty good to go for are the comedy club, leadership seminar, and cultural diversity seminar.

Introducing a New Product

When introducing a new product, you will be sent to a screen where you get to pick a product, research the market, and launch the product directly. I suggest researching the market to see the demand for the product and the competition. For Grace & Co., I launched a few coffee products directly as they’re staples of most coffeehouses everywhere. Still, I do change the pastries depending on demand.

After you pick your product, you’ll be greeted by the same screen mentioned above about price/unit, marketing/unit, etc. Most of the time, the supplier will be mediocre or even bad from the start, so it’s best to look for a better supplier.

From there, you’ll go year by year, adjusting your production based on your analyst’s estimates, which is a simple calculation. Take your production, multiply by the analyst’s percentage recommendation, and add the number to your production. If you need to reduce your supply, just subtract instead.

My Thoughts So Far

In conclusion, the update is pretty good overall. A few things need to be added to elevate the update even further. As I mentioned, loans, stocks, and investors should be added to make it easier for players to start a business without cheesing it. Additionally, the developers should add lower, investment-cost companies as well. Owning multiple businesses is a must, and the fact you can’t do it is pretty baffling. Many businessmen/businesswomen have various companies they manage, so I’m surprised it’s not a thing here. Obviously, there’s a lack of inheriting your business to your son or grandson, but the developers address that already.

Hopefully, this guide has been helpful to you. If you have any questions, please let me know. Cheers!

Eze

Eze Uchenna is the managing editor of the Ezechax blog. When he’s not working, you can find him enjoying a captivating television show or sharing fun moment with friends.