An entrepreneur is a person who is responsible for setting up and running a business or an enterprise. An entrepreneur works for the benefit of the people by opening up various employment opportunities, which leads to the growth of other sectors.
Functions of an Entrepreneur
Entrepreneurs bring in overall change through innovation for the maximum social good. In this process, they accelerate personal, economic as well and human development with the help of their outstanding leadership qualities. The following are the functions of an entrepreneur:
- Risk Absorption
- Formulate Strategic Business Decisions
- Executes Managerial Functions
- Adopt Innovation Function
- Management Control
Before starting a business, an entrepreneur assumes all forms of possible risks of the business. A business risk also includes the risk due to changes in the tastes and preferences of consumers, changes in the techniques of production, and new inventions. Insurance of such risks is not possible.
If such risks occur, the entrepreneur has to bear the loss himself. As a result, risk-bearing or uncertainty-bearing still forms one of the significant functions of an entrepreneur. An entrepreneur always tries to reduce uncertainties with his initiative, efforts, skill, and good judgment.
Formulate Strategic Business Decisions
Entrepreneurs need to make the decision about the nature and type of goods to be produced. They choose a specific industry that they see as most profitable. They deploy the production methods which they seek as most cost-effective.
They also implement suitable changes in the size of the business, its location, and techniques of production and do everything that is needed for the development of their business.
Executes Managerial Functions
Entrepreneurs also perform managerial functions though the managerial functions are not the same as the entrepreneurial functions.
They formulate production plans, arrange finances, purchase raw materials, provide production facilities, organize sales, and also assume the task of personnel management. Large establishments hire paid managerial personnel to delegate management functions.
Adopt Innovation Function
A vital function of an entrepreneur is “Innovation” Entrepreneurs conceive the idea for new products or improvements in the quality of the production line. They also consider the economic inability and technological feasibility of bringing improvement in quality.
The introduction of different and advanced electronic gadgets is an example of such an innovation of new products. Innovation is an ongoing function rather than once for all, or possibly alternating activity.
Entrepreneurs themselves manage and control the business. Entrepreneurs should select the right persons with the right ability to work with them.
FAQs Section of Functions of an Entrepreneur
What are the functions of an entrepreneur?
These are some important functions of an entrepreneur:
1. Risk Absorption
2. Formulate Strategic Business Decisions
3. Executes Managerial Functions
4. Adopt Innovation Function
5. Management Control.