In working up a spreadsheet to track covenant finances, I find that a covenant may cover all of its consumable expenses with careful management. It seems that a covenant might generate a surplus from craftsmen.
First, is that theoretically correct?
Second, in general is the baseline assumption that the craftsmen's work is their own, and they get the profits, or that the covenant sells the craftwork and keeps the overt profits, or that the covenant gets a cut? The craftsmen do get a wage, so I tend to think the craft surplus goes to the covenant, but ...
Obviously, laborers are working for a wage and their surplus product is the covenant's.
No, or at least not using the economic model of Covenants - which is not a terribly good model, in the sense that it requires a lot of complex accounting while at the same time being neither very realistic nor very "engaging" (in terms of story potential, its own minigame etc.). Harnmaster does it better
Covenants separates sources of income, and expenses.
Sources of income are supposed to pay for their own internal costs. So if your Lesser source of income is a blacksmith's shop, the cost of the blacksmith's wages, his apprentices etc. is assumed to be already accounted for. You get a net 40 mythic pounds of profit/year, and the blacksmith's just background colour. You can't use him to reduce the expenses of the covenant.
Expenses of the covenant (consumables etc.) may be mitigated by hiring craftsmen, but those craftsmen produce no surplus, they just reduce the expenses. Any "virtual surplus" is wasted. Note that there is some mild measure of realism in this: a bonded craftsman has no infrastructure in place to sell his wares and generate income from that. He just performs his tasks for the community he is bonded to, and if there's no work to do, well, it's vacation time Setting up the infrastructure to sell the extra surplus of the covenant's craftsmen would require stories that would ultimately produce a new Boon (a new source of income).
From what I understand, the cost savings are the marginal difference for having to contract work out and being able to have it done locally. There's presumably a lot more going on than just the official Covenant finances. Anyway, if there's more savings than is actually being spent, that just means there isn't enough Covenant-related work to keep them as busy as they could be.
Note that your craftsmen cost 2 or 3 pounds a year, so you'll want to make sure you're getting your money's worth out of them. In a Summer Covenant a craftsman with a Craft of 5 doesn't actually save anything.
(And don't try to look too close at the system - you'll break it.)
Now, if you want to be a little more compatible with how the rest of the game works, you might allow Attributes to modify Craft levels for savings.
OK, so income from craftsmen would be from specifically employed ones. That works. I can just limit the savings to the actual expense of the consumables.
I also do not seem to be able to find any particular costs associated with starting a new source of income. I realize that it would involve a story, or at least an investment of character time and effort, but there's generally a capital cost as well. Perhaps City & Guild has something...
Yes, that gives Labor Points, but not costs for material, bribes, and other start expenses. I suppose I can work out an equivalence of labor points to pounds based on income. I don't particularly want to spend a lot of effort on accounting, but such things are not without cost - and coming up with the investment capital is an excuse for a story or complication itself.