An entrepreneur has to perform many tasks to be able to make his or her business successful in the market. Here are some of the various functions that an entrepreneur must perform.
Many people in this world call themselves an entrepreneur. But there are certain aspects that differentiates a successful entrepreneur from the rest of them. They are the ones who are willing to take big calculated risks in hopes of achieving profit out of it. Entrepreneurs think outside the box and possess a creative and unique outlook. They have the ability to view things from a different angle, which helps them to think quickly and solve problems. An entrepreneur has to perform various functions in order to gain success.
Here is a list of some of the important functions that they perform :
1. Decision Making :
The famous business saying, " What to produce? How much to produce? Where to produce? And where to sell them?" is a decision that the entrepreneur plays a huge role in. It is the entrepreneur's responsibility to frame the production policy. Other things that require the entrepreneus decision making ability include deciding the scale of production, the various different factors of production that are to be employed, and the sale of finished goods and services.
2. Risk-Taking and Bearing Uncertainties :
This is probably one of the most important functions that is to be performed by an entrepreneur. Production in this era is very risky and the entrepreneur is expected to produce goods or services in anticipation of future demand. There are two major kinds of risks. The first one is known as measureable or insurable risks. These are the type that can be insured against. Examples are risks of fire, loss of goods in transit, theft, natural calamities, etc. The other type of risks, are those that cannot be measured, also known as uncertainties. These risks cannot be insured against because their probability cannot be calculated accurately. Examples of uncertainties include competitive risk, technical risk and so on.The entrepreneur has to take both kinds of risks under production.
Innovation plays a big role in the success of a business, and it is very important for the entrepreneur to have an innovative mind. They must make frequent inventions of new products, new techniques, new and improved methods of production and discovering new markets. This ability will help the entrepreneur and his or her business to improve competitive position in the market and increase the earnings and profit. An innovative mind will definitely lead to success and it will show in the form of profits and market position of the company.
4. Division of Income :
Another major function of an entrepreneur is to make arrangements for the division of total income of the company among the various different factors of production that have been employed. If a business faces loss, they are still liable to pay rent charges, interests, wages and salaries and other contractual incomes out of the realised sales.
5. Management Control :
One of the chief functions of the entrepreneur is management control. The entrepreneur himself conducts the managing and controlling of the business. So it is very important for him to possess a high degree of management ability to select the correct people to work with him to achieve organisational goals. Although, in recent times this trend has declined as businesses nowadays have increasing number of managers for this task.
6. Turning Ideas into Action :
A good entrepreneur must have the ability to turn their ideas into real life actions. To be be able to do this they must collect information regarding their ideas, whether it be a product or a service and conduct research. Analyse and check the feasibility of their idea and make it possible to perform them.
7. Resourcing :
An entrepreneur needs various resources such as money, material, machinery, and manpower which keeps the enterprise running. It is the entrepreneurs job to make sure that all these resources are readily available for the business to produce its goods and services.
8. Growth and Development :
Sustaining the business for long term profit is very important and the entrepreneur helps to achieve it with continuous growth and development. The entrepreneur must aim for a higher goal to keep growing and developing the business along the way. An entrepreneur should never just be satisfied with achieving one goal, but he must also strive to achieve excellence by setting the bar higher and higher for himself each time.
All economic activities including the most complex ones are finally aimed at consumption. However, to understand the kind of consumption that may be preferred by an individual, the concept of utility and indifference curve are extremely helpful.
Entrepreneurs share certain common characteristics, but also differ from each other in several aspects. These differences can form the basis of their classification, thereby giving rise to various types of entrepreneurs.
Successful Entrepreneurs possess some distinctive qualities, which they use effectively during their entrepreneurial voyage. These qualities help them to follow their dream in a systematic manner.