An entrepreneur is the individual who innovate a business idea. They play a key role in the economy of any country. Entrepreneurs perform various crucial functions. He has to take risk for any unforeseen situation in future. There are various responsibilities which an entrepreneur performs. Some of them are listed below with little details.
In this blog, we are going to delve deep into the topic key functions of an entrepreneur. They are listed below:
Mastering Entrepreneurship: A Guide to Key Roles and Responsibilities
Function of an entrepreneur
- Innovation: It is the basic function of annual renewal. Since an entrepreneur is an innovator too, he introduces new products, combining various means of production, searching for new sources of raw material and new market for product. Entrepreneurs introduces something new in the economic activity. The entrepreneur foresees potentially profitable opportunity and it tries to exploit it.
- Risk taking: The entrepreneur takes the responsibility for a loss that may occur due to unforeseen contingencies in the future. And entrepreneur reduces uncertainty in his or her plan of investment, diversification of production expansion of the enterprise. The entrepreneur Is a self confident and highly optimistic person, willing to assume the risks involved in innovations, new ventures and expansion of an existing venture.
- Organization building: Organization and management are the main functions of an entrepreneur. They refer to the bringing together of the various factors of production. The purpose is to allocate the productive resources in order to minimize losses and reduce costs in production. All the important decisions related to an enterprise is taken by the entrepreneur. He alone vitamins the lines of business to expand and capital to employ. Thus an entrepreneur is the final judge and the conduct of his business.
- Discovery of an idea: The entrepreneur discovers any idea and visualizes that for a particular type of business, there are various important business. It can run profitably using that particular opportunity. The idea may be to exploit new areas of natural resources, more profitable into or an existing line of business. He develops the idea with the experts in the field and if they are convinced then he will go ahead with more exhaustive analysis.
- Detailed investigation:The entrepreneur will perform a detailed investigation about the total demand of the product. After determining the prospective demand for quotes, he will think of arranging finances for the venture, along with the availability of power, labour, raw materials and machinery. If it is a new line of business, the work of estimation might get complicated. The estimates should be based on proper analysis of various factors.
- Assembling the requirements: After making sure that the proposition is practical and profitable, the entrepreneur proceeds to assemble the requirements. He persuades some more people to join him on board. The entrepreneur may be required to patent his discovery or innovation if he has invented something new. It is his function to select the factory site and decide about supplies. Preliminary contracts are finalized and project is set to begin.
- Proposition: The entrepreneur decides about the capital structure of the enterprise. The requirements of finance are estimated first then the sources from which money will come up are determined. Long term and short term financial requirements are estimated and the type of source of funds is also decided – share, debentures, loans and so on.
- Planning: Planning is basically the managerial function of the entrepreneur. He has to plan the further actions to be taken in order to fulfil and achieve the desired objective. He has to take important decision in advance like what to do, when to do, how to do and who will do a particular task.
- Organizing:The function of organizing is to arrange, guide, coordinate, direct and control theactivities of the factors of production. The entrepreneur set up objectives which is to be achieved by his team. The team work as a whole and look after different aspects.
- Staffing: The function involves making appointments for the positions created by the organizational process. It is concerned with the human resources of an enterprise. It comprises human resources, recruitment, manpower planning, selection and placement of manpower, human resource development, promotion, transfer, appraisal and so on.
- Directing: It is concerned with carrying out the desired plans. It initiates organized and planned action and it shows effective performance by subordinates towards the accomplishment of group activities.
- Leadership: it is the process by which an entrepreneur imaginatively directs or guides and influences the work of others in choosing and attaining specified goals by meditating between the individual and organization in such a manner that both will get the maximum satisfaction.
- Communication: It constitutes a very important function of the entrepreneur. It is one the major problems faced by entrepreneurs. It has been established that entrepreneurs spend 75% to 90% of their working time communicating with others. It consists of mutual interchange and understanding of ideas, emotions, knowledge and information between two or more individuals. If there is lack of effective communication, then nothing can happen in management.
- Motivation: it is the psychological process of creating an urged remark units to do certain things or behave in the desired manner. The importance of motivation can be realized from the fact that the performance of a worker depends upon his or her ability and the motivation. A sound motivation system must be productive, competitive, comprehensive and flexible.The motivation must cater to the psychological, social, safety and financial needs of the employees.
- Supervision: after issuing instructions, the entrepreneur has to see the given instructions are carried out. Supervision refers to the job of overseeing subordinates at work to ensure the maximum utilization of resources, to get the required and directed work done and to correct the subordinates whenever they go wrong.
- Coordination: it is one of the most important functions as it is essential to channelize the activities of various individuals and their organization for the achievement of common goals. The entrepreneur has to make sure that the work of different segments is going according to predetermined targets and corrective measures have to be initialized if there is any deviation.
- Controlling: it is the process which enables the entrepreneur to get his or her company’s policies implemented and take corrective action of performances not according to the predetermined standards. The process begins with start pushing standards of performance, measuring actual performance, comparing the actual performance with this standard, finding variations and finally taking corrective action.
- Production: It is the key function of an entrepreneur. The activities of production are independent of the size of the undertaking. In a small concern, one person may be undertaking this function whereas in large organizations, this activity may be undertaken by viewed as individuals or separate teams. It is the creation of goods and services. It consists of manufacturing and advisory activities.
- Finance: it is the most important aspect in all enterprises. It remains a focus of all business activities. The need for money is continuous. It starts with the setting up of an enterprise and remains at all times period the development and expansion of enterprise rather than its more on the console it is the duty of the entrepreneur to look and analyse into the various source of funding create the range for them as and when required.
- Marketing: It is primarily concerned with the movement of goods and services. It is moved from the producer to the consumers. It values the satisfaction of wants of consumers. It promotes the wellbeing of business enterprise. So it is the role of entrepreneur to strategically place his company in an advantageous position to secure the top position in the market.
- Accounting: it is defined as a systematic recording of entrepreneurial transactions often enterprise and the financial position of the enterprises. The entrepreneurs should look into the record keeping of the entries of all transactions which take place in the organization so that he is aware of his financial position.
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