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Functions of An Entrepreneur

An entrepreneur performs many functions including planning projects, managing businesses, facing risks and uncertainties, distributing rewards to factors of production, marketing and selling products, deciding production scales, identifying opportunities, turning ideas into action through feasibility studies and resourcing, setting up enterprises through legal formalities and site selection, and managing and growing enterprises over time.

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MAHENDRA SHIVAJI DHENAK
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71K views

Functions of An Entrepreneur

An entrepreneur performs many functions including planning projects, managing businesses, facing risks and uncertainties, distributing rewards to factors of production, marketing and selling products, deciding production scales, identifying opportunities, turning ideas into action through feasibility studies and resourcing, setting up enterprises through legal formalities and site selection, and managing and growing enterprises over time.

Uploaded by

MAHENDRA SHIVAJI DHENAK
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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FUNCTIONS OF AN ENTREPRENEUR.

These are the functions performed by an entrepreneur.

1. Planning of the project: He is the organizer to conceive the idea of launching the
project and to program the structure of business.

2. Management: The entrepreneur is also responsible for the management


of business. He tries to have a least cost combination of factors of production.

3. To Face Risks: He faces uncertainly and bears risks in his business uncertainly
comprising those risks against which it is not possible to insure. He also faces the
risk of other producers may enter the market.

4. Distribution of Rewards: He is responsible of distributing the rewards to all


factors of production. He pays the reward in the shape of rent, wage, and interest
and bears the risk of profit or loss himself.

5. Sale of Products: An entrepreneur is also responsible of marketing, advertising.


He wants to maximize his profits by selling his product in the market.

6. Scale of Production: He decided the scale of business in according with the


provision of capital. Then, he takes the decision of what where and how to
produce goods.

7. Joint stock Organization: In a partnership, the entrepreneurial functions are


divided between the partners. But in public limited company, the board of
directors takes this responsibility with nationalized enterprise; the entrepreneurial
decisions are left to the government or a body to which government has delegated
its powers.

8. Identifying entrepreneurial opportunity – There are many opportunities in the


world of business. These are based on human needs like food, fashion, education,
etc., which are constantly changing. These opportunities are not realised by
common man, but an entrepreneur senses the opportunities faster than others do.
An entrepreneur therefore, has to keep his eyes and ears open and require
imagination, creativity and informativeness.
9. Turning ideas into action – An entrepreneur should be capable of turning his
ideas into reality. He collects information regarding the ideas, products, practices
to suit the demand in the market. Further steps are taken to achieve the goals in
the light of the information collected.

10. Feasibility study – The entrepreneur conducts studies to assess the market
feasibility of the proposed product or services. He anticipates problems and
assesses quantity, quality, cost and sources of inputs required to run the
enterprise. Such a blue print of all the activities is termed as a 'business plan' or a
'project report'.

11. Resourcing – The entrepreneur needs various resources in terms of money,


machine, material, and men to running the enterprise successfully. An essential
function of an entrepreneur is to ensure the availability of all these resources.

12. Setting up of the Enterprise – For setting up an enterprise the entrepreneur may
need to fulfil some legal formalities. He also tries to find out a suitable location,
design the premises, install machinery and do many other things.

13. Managing the enterprise – One of the important function of an entrepreneur is to


run the enterprise. He has to manage men, material, finance and organize
production of goods and services. He has to market each product and service,
after ensuring appropriate returns (profits) of the investment. Only a properly
managed organisation yields desired results.

14. Growth and Development – Once the enterprise achieves its desired results, the
entrepreneur has to explore another higher goal for its proper growth and
development. The entrepreneur is not satisfied only with achieving a set goal but
constantly strives for achieving excellence.

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