A Productive Enterprise is a feature exclusive to Mount&Blade: Warband that allows a player to build a small industrial facility for a large initial lump-sum plus a weekly maintenance fee. In return, the facility can convert raw material goods into finished product goods that usually have a higher sell price, allowing the player to profit from the difference. An enterprise can be set to run automatically, allowing the player to set up several sources of additional income that require little to no maintenance, allowing the player to focus their time on issues other than generating revenues once the player can build up the initial down payment to have a large set of enterprises built.
Productive enterprises are only built in towns by speaking to the Guild Master about productive enterprises, but only one can be built per town. They can only be set up in towns where the player has a neutral or positive reputation for the town, the lord, and the faction that controls the town.
If the faction that controls the town becomes hostile to the player, the player will not receive profits from the facilities for as long as they are hostile, and in the weekly budget report, it will say that the shop is "under sequestration". However, the enterprise's warehouse will not be altered in any way, and operation will be resumed immediately once the former enemy faction's hostilities with the player are over.
Once the initial lump sum of money is spent, seven days must pass before the facility is completely built.
You may only set up one of nine shops per town:
|Shop||Build cost||Cost/week||Input||Produces||Profit (avg)||Rate of return||Profit Margin|
|Mill and Bakery||1,500||50||6 grain||6 bread||70||4.6%||23.3%|
|Brewery||2,500||50||1 grain||2 ale||160||6.4%||66.7%|
|Tannery||8,000||50||3 hides||3 leatherwork||250||3.2%||37.9%|
|Wine Press||5,000||60||4 grapes||2 wine||80||1.6%||18.2%|
|Oil Press||4,500||80||6 olives||2 oil||220||4.9%||24.4%|
|Ironworks||3,500||60||2 iron||2 tools||232||6.6%||28.3%|
|Velvet Weavery and Dyeworks||10,000||160||2 raw silk + 1 dyes||2 velvet||490||4.9%||23.9%|
|Wool Cloth Weavery||6,000||120||2 wool||2 wool cloth||120||2.0%||24.0%|
|Linen Weavery||6,000||120||2 flax||2 linen||80||1.3%||16.0%|
The "average profit" in the table is calculated from the base value of the goods in question. As these are commodities, their actual prices will radically differ from one town to another, and all the standard issues of trade, and hence, the low and high value of goods according to supply, apply. The formula used estimating the weekly profit is: value of outputs minus value of inputs minus cost per week.
Your facility can drastically impact local supply by buying up the supply of raw materials, and flooding the market with their finished products, driving raw material prices up, product prices down, and overall resulting in diminishing profits over time unless caravans or the player can stabilize the prices through trading commodities to other towns.
A productive enterprise will buy, convert goods of one type into goods of another, and then sell back those goods on the exact moment of the weekly budget report, and markets will adjust their inventories at the same time. A player can manipulate the markets by buying up the finished product or selling off the raw material just before this occurs, adjusting prices for those goods. Like with real markets, it is possible for players to "speculate" in the markets - buying up, manufacturing, and stockpiling goods in the warehouses of your facilities until prices are high before selling them off at potentially greater profits.
Each facility has its own warehouse that lets you store a large number of items. Raw materials of the type the facility uses will be consumed instead of purchasing directly from the market if you place those raw materials in the warehouse. You can also direct the enterprise to stockpile its products in the warehouse instead of selling them to the market, so that you can sell them in other towns or to wait for prices to rise. You can also store items unrelated to the facility, which will simply be stored for later retrieval if you have yet to claim a fief.
Generally, a highly productive town will produce many goods on their own that drive prices down and make your own businesses, which have fixed production rates, less profitable, meaning that sometimes less prosperous towns are more lucrative markets. Conversely, villages are the providers of the raw materials for your industry, so if villages are routinely looted, the prices of your raw materials go up, eating into your profits, as well.
The most lucrative markets, however, are locations where villages produce a raw material that their associated towns do not actually produce the finished product. Curaw's villages, for example, produce iron, but Curaw itself does not produce tools, making iron very inexpensive and tools produced from that iron relatively valuable (at least, until you flood the market) in that town.
The frequency of caravan visits also plays a role: caravans tend to normalize the prices by buying up finished products that are overabundant and cheap (raising the prices of your own goods if you are flooding the market with more goods than it can absorb), but also buying up cheaper raw materials if you are enjoying an abundant supply of cheap materials, and cutting into your profit margins as well. A town with infrequent caravan visits may provide very cheap raw materials, but because your industry will flood the market with goods, will also drastically lower the prices of your finished products as well. In these cases, the most profitable course of action may be to order the industry to warehouse the products so that you can sell them to other markets yourself, which requires personal supervision of the industry, but can allow you to enjoy the full benefit of lower raw material prices and exploiting high finished product prices in other towns.
Generally speaking, mills and bakeries are unprofitable, as you will face too much competition as every town already has a bakery and every village produces grain. Wool cloth, likewise, is produced almost everywhere, but wool itself generally is not, often leading to negative profit margins. Conversely, breweries are generally reliable, if not terribly profitable ventures, since the price of two ale will almost always be far above that of a single grain.
The other products all generally depend upon the relative availability of raw materials and what a town already produces. Towns that produce goods whose raw materials are not produced by their villages (or whose villages are routinely ransacked) will offer poor or even negative profit margins, while towns that do not produce a product while their villages produce a raw material will offer up great profits in that type of product.
An alternate way to increase profits is to "cut out the middleman", so to speak, by simply looting villages and plundering the raw materials needed by your enterprise to make finished products. This can completely phase out the need for buying raw materials from the market and waiting for more from the outlying villages and trading caravans. However, looting villages drastically decreases your honor, drastically decreases relations with the faction and vassal who owns the village you loot, and obviously drastically decreasing relations with said village. But when you choose to loot villages to gain raw materials, make sure the villages aren't owned by the same faction who owns the town in which your enterprise(s) are located, as the faction's authorities will seize your business.
Asking villagers what their villages and towns produce before making your choice can help you get a grasp of the long-term prospects for building a facility in a town. Keep in mind castle villages will trade goods to the nearest town of their own faction - sometimes meaning that raw materials will become available or unavailable to a town based upon whether the same faction that owns the town owns the nearby castles or not.
A bug exists in pre v1.1 games that disallows players to purchase a Productive Enterprise, even if all the prequisites are met. This can be resolved simply by patching up to any version after 1.1.