First, remember this is an abstraction.
It is intended to be a simple system for PCs to run businesses. If the PCs don't want to run the Team as a business, they are not a Team in the Ultimate Campaign sense, and you can use the regular rules for Hirelings to handle that.
As to the upgrading.. as an abstraction, it is perfectly justifiable to say you have replaced with L1 guards with L3 guards. Upgrading can mean replacing the people, not just training up the ones you have.
An Inn is a Building, not an Organization. An Organization is made up of Teams, a Building is made up of Rooms. Rooms come with basic staff, so you don't need to hire anyone else to "work" the Rooms. If your players want to be 5 different Inns, they can be.. but since that's well outside the normal use, you could say that they are each in competition with the others. At that point, you're in house rules territory, and how you handle it is up to you. In a small settlement, giving them each a roll, but applying a penalty for each competitor (like -2 per, for -8 total with 4 competitors) might make sense.
Thanks for your opinions, They also have their own business's they are setting up but wanted personal guards as well. I was looking through 3.5 books for hirelings to see how it would compare. I was thinking of settling on skilled labor cost for their time but you get back the income they would create. (1.5g cost then you get back 2s per day). But it seemed silly that elite guards cost you less the regular ones.
But I have had a hard time finding much information about hiring people in pathfinder, in particular combat personnel. In 3.5 one book has people at 2sp per level per day, which seems fair enough(5 guards 1g/day - 2sp for your cut) (5 elite guards 3g/day - 4sp for your cut). My main problem was the whole "what is an organization" question. Obviously 5 guards working for you shouldn't cost 1g/day because 1.2g/day is your cut(-2sp is theirs lol). Though when you get to elite guards cost of 3g/day a 1.4g/day as your cut isn't so unbelievable.
I just don't like how arbitrary the rolls make everything, obviously a DM will put limits on it but it's the difference between having 10 laborer teams in a company and having 10 separate companies with 1 team each. By the book the teams make +2 each, that means the big company makes 20+10 on it's average check or about 3g per day, yet the 10 separate teams make (2+10)*10 every day or about 12g per day. Which should be the oposite of true, a big company should have larger profits per person then smaller groups.
I guess I just like more concrete rules as I feel like I am cheating the players or being too harsh.
I think I am going to homerule that managers and the player being in the city themselves get the roll, otherwise they only create their base amount.
The only thing I can think of is that the Organization of laborers would require only 1 manager while 10 separate teams could require 1 manager apiece. Or am I wrong on this?
Or course this is assuming that you want to use a manager. So far as I can tell they are only useful for keeping your business from turning on you after 30 days away.
Sorry for being a necromancer here.
I once wondered what to charge per day for these Teams as well. It has been a long time, but I looked at the Hirelings in the Core Rulebook and compared how much they cost per day to the rules for making profits in the Ultimate Campaign.
The best way to decide how much these Teams cost per day is to look at their bonus they provide to a business. So, for example, you just want to have a team of guards watch your home. In the Team entry for Guards they provide a +2 bonus normally. So using the profits mechanic 2/10=.2. As a group those guards cost 2 silver a day. (Example in the book says 47 / 10 = 4.7 gold, so I'll assume .2 means 2 silver as well). This cost assumes you're contracting them, meaning stable pay. Normally included is a place to sleep and get food, that you provide.
That doesn't seem like much in terms if players that roll in piles of gold, but when you consider a time setting earning 1.2 gold a month (individually) is amazing to a common person. Just look at what it costs to rent a room at an Inn or buy a meal in the Core Book if you want to compare.
The way I figure it is the guys you can hire in the Core Rulebook are more expensive to purchase per/day is because they're already contracted, and you're going to their guild/business to hire them as temp labor in an unfamiliar town. (Who the hell are you?!)
That campaign may have ended already, or you worked out your own system. Maybe this will halp someone else someday.
Here's my take:
An organisation is a group of people that you employ with the intent for them to earn you money from their work. Organisations are self-funding, so once you've paid the cost of hiring them, they earn enough to pay their wages and provide you with a profit.
However, if you are simply hiring people to fulfil a personal contract with you, rather than being employed by you, you have hirelings, not an organisation.
Let's try an example:
Thoro wants to hire some mercenaries to protect a trade wagon. For an outlay of 3 sp/day per mercenary, he can get hirelings. Job done.
Or, he can spend the time recruiting employees with a promise of steady work, pay the associated costs in the downtime rules, and now he has a mercenary group of his own. An organisation. He can use them to protect his trade wagon, if he wants. They will not earn him any gold while doing so. When that job has finished, he can hire them out, resulting in earnings checks to turn him a profit.
You can fluff how the organisation self-funds when not being used for profit in any way you like: they'll be bribed, catch thieves, protect your wealth, whatever, so that their net cost to you is zero (purely for simplified bookkeeping).
In the long term, an organisation is more economically sound, but because of the higher start-up costs (in terms of time and gold) it won't always be the best choice at the time they're needed.
To just tag onto Chemlak's statement; in law, generally speaking these would be referred to as... (with variations depending on country of origin):
Contract for Services:
You hire the person to carry out their service, usually for a specific job which takes a specific length of time. They employ themselves, listen to your requirements, follow their own instruction. You hire them for the service they provide. They provide their own tools and equipment. You pay for resources used. (Eg: Mercenaries, Carpenter to repair door)
Contract of Employment:
You employ the person to be available to carry out various jobs, skills and services. They are in your service. A hired person. You provide the uniform, the tools and equipment, the resources for the job. And probably the cost of transport to/from their work. They belong to you for a specified period and are obliged to follow your instructions. You are responsible for them. (Eg: Stonemason hired for 6 months to build your castle wall, Guards for 12 months to man the gatehouse).
Usually the Contract for Services tends to be 'per job', whereas the Contract of Employment is for a longer period - months/years.
So running an organisation would probably entail Employment Contracts, with occasional Services Contracts when specific jobs need doing. If you are forming a team, they would likely be Employees.
If your players are running their business together, they are a Partnership. If on their own, they are classed as Sole Traders - each responsible for their own profit centre.