Do not take all of the initial grants at once. Although there is no punishment for using the funds for reasons other than as intended or for not completing grant related tasks in a given time, having all of the cash available right off the bat makes you reckless. Plan your prison first in planning mode, and take grants only as you need them to complete the phases of your project. If you only have 10 prisoners, there is relatively little benefit in building a massive cell block. You can easily extend buildings, so start small, and build only as much foundation as you actually need. Extend the foundations as your capacity requires. By not taking all grants as soon as they are available, it will force you to think twice before starting a major building project. There is nothing worse than building a massive foundation, and having no money left to fill it out with.
Use a holding cell initially. Holding cells are much cheaper than individual cells, and can allow you to raise your prisoner numbers (and therefore daily income) quickly. Put beds, TVs and phones in the holding cell. They are not requirements, but will keep your prisoners much more happy early on. Without them, prisoners' sleep, family and recreation needs will spiral out of control before you know it, and riots will ensue. Ensure that there is one bed per prisoner in a holding cell, one phone and TV to every 3-5 prisoners and one toilet to every 10 or so prisoners sharing the cell. One bench is sufficient regardless of prisoner numbers, as they will be much more inclined to use benches in the canteen, yard or other areas during their free time. Holding cell doors close even during the day (when regular cell doors remain open). Ensure that there is one guard stationed in each holding cell to avoid prisoners getting locked in for extended periods of time. Do not rush to build individual cells for prisoners, (except possibly getting your capacity up to 15, to receive the $10,000 grant completion bonus). As long as there are beds, TVs and phones, prisoners will happily remain in a holding cell for several days or weeks, allowing you to work on other things like laundry and workshops as an initial priority. Holding cells can easily be torn down and the space converted into standard cells later (where you will already have beds for them). Prisoners also do not attempt to tunnel out of holding cells, so use this to your advantage early until you are ready to tackle potential prisoner escapes.
Keep your prisoners occupied. You should aim to install TVs, phones, toilets and benches in the yard (if you intend to keep yard time scheduled on the regime) and canteen (especially if you have multiple "Eating" times each day). Prisoners who have already eaten earlier in the day and no longer have a hunger need, or who do not have an exercise need, will still visit either the canteen or yard during defined eating or yard times. They will not, however eat or exercise, and will therefore just stop when they get into the area, and get in the way. Phones, TVs and toilets will allow them to attend to other needs during these times of day when they can't go elsewhere. It also keeps them out of the way of prisoners who do need to attend to these needs.
Set meal quantity and variety to high. Hungry prisoners are riotous prisoners, well fed prisoners are content prisoners. If they are well fed, they will put up with a lot of other issues, especially early on.
Research deployment as your first priority. Set your kitchen, storerooms etc as staff only as early as possible, this will prevent prisoners from getting hold of the worst kinds of weapons.
Leave no empty space on your daily schedule. White space is essentially lockdown your prisoners will be forced to return to their cells with no way of fulfilling needs like entertainment, family or freedom, which prisoners really dislike. Replace all empty space with "Free time" initially, and they will attend to their own needs quite happily.
Research Prison Labour as soon as possible. It is the only chance you have of making a prison profitable, and riot free. Once you have researched Prison Labour, convert some of this free time into work, but still ensure that there is sufficient free time available for prisoners to attend to their other needs. Dirty uniforms and surroundings do not make prisoners happy, and will result in serious complaints. Ensure that laundry rooms and cleaning cupboards are installed and staffed as soon as Prison Labour is available. Prisoners can later be replaced by janitors to keep the prison clean if you prefer, but these can be researched later. Split the working day up. You lose a little efficiency—depending on the layout of your prison, it can take as much as 30 in game minutes for prisoners to get to the workshop and begin work—but your prisoners are much happier for it. Two 4 hour work shifts broken up by a couple of hours of free time is much better for prisoner morale than one 7 or 8 hour shift, and the financial losses are fairly minimal. Several smaller (but interconnected) workshops are better than one large one. Although for efficiency's sake, they should all be in the same room or complex, share an entrance and exits, and prisoners should be able to freely move from one workshop to another, breaking it it up into smaller units using fence and (locked open) doors will allow you to assign many more prisoners to work in PI, greatly increasing your daily profits.
Maintain a good guard to prisoner ratio. Typically aim for 1 guard per enclosed area (cell block, canteen, workshop, laundry etc) which prisoners have access to, plus around 5-10% of your prisoner capacity as unassigned guards, with a minimum of 4 unassigned guards at all times.
Keep contraband out of your prison. Detecting contraband is imperative. Although expensive, metal detectors are imperative in ensuring your prison runs smoothly. At minimum, ensure that prisoners need to pass through one when entering and leaving the canteen, workshop, visiting area and kitchen (if you intend to use prisoners to work the kitchens - be careful if you do this as kitchens are contraband goldmines). Ideally, also make them pass through one before returning to their cells, or any area with a toilet or TV, where they can stash contraband, but this can be a longer term goal. Dog patrols help detect smelly, non metallic contraband. However in current versions of the game, this is not so important, as it has no real value to prisoners. Only tools or weapons can be used, and all of these are metal. However dogs are very useful in detecting possible tunnels, though currently seem to throw up a lot of false positives. Search every cell block at least once every day.The best time to do this is during meal or yard times, as all prisoners will be out of the cell block (and will therefore not be searched unnecessarily, which is a serious complaint that increases the danger level in the prison). Click on one bed or toilet in each cell block and choose "Search Cell Block". This will search every possible hiding place in the cell block, like a shakedown, but without angering the prisoners. Ensure at least one guard is assigned to the canteen (not just to patrol it) during this, as all available guards, including those on patrol will leave their posts to carry out the search.
Use dogs and CCTV sparingly. In current versions of the game, it is much better to spend the money on additional guards, rather than lots of dogs or CCTV cameras. though this will undoubtedly change.
Grow your prison organically. Turn off all intake for a few days if you feel yourself getting overwhelmed, do not run out of money building huge new cell blocks until you are at or over your capacity (remember to add any additional capacity you have from holding cells as this is not included in the number displayed on screen). Patience is key. Trying to get too big too quickly will inevitably lead to even longer periods of waiting while you slowly build up cash reserves to complete your current project. It is best not to start a project until you can fully fund it to completion, and keep the money in reserve for unforeseen emergencies like repairs and tunnel removal.
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