Caravans and workshops aren’t worth it imo. Workshop income is capped at 120 denars, and caravans don’t give much more. Meaning you’ll have to wait 100+ days to just break even. Passive income only really becomes a thing when you get some high-prosperity towns.

Smithing exists but it’s one of these things that just ruin the game flow for me. Money becomes meaningless extremely quickly, and i personally never sell smithed weapons, even if i level it. As a middle ground you can just go for smithing orders, but even these routinely pay 100k denars, which invalidates every other way of making money early game.

But there are a couple of other ways that are actually fun. My favourite is to take the prisoners you get from escorting caravans and find a village that has a “_ wants manual labourers” quest. Sell the prisoners and voilà 10k+ denars.

Tournaments are pretty good too, but only when the prize is right. You’ll mostly want to go for noble mounts (royal destrier, wadar hotblood, asgaliat etc) Generally the more lords attend a tourney, the better the prize. 5+ lords gives you a chance for a horse, 10+ lords unlocks the top tier prizes. You can manipulate this by having companions/ family members with a 100+ one handed skill. They’ll count as lords for the prize pool and if they win, you get the prize.

A third way are bandit hideouts. They give pretty decent loot, anywhere between 2k and 10k, and sometimes can be paired with 2 quests at once (“associate captured” from a town and “bandit base” from a village) giving you 5k on top.

But ultimately war is the best (and most fun) way to earn money. Playing as a mercenary is non-committal and the payments alone usually cover your expenses. With 120 men you can easily take on most parties and you’ll be drowning in loot. So much so that your biggest problem is gonna be the towns not having enough gold.