define Entrepreneur ? What are its function?
Answers
Answer:
ENTREPRENEUR:
A person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.
FUNCTION:
The two main functions of entrepreneurs are first, taking the risk of developing new products or services and, second, successfully bringing new products and services into the marketplace.
Answer:
“To me, an entrepreneur is someone who mixes passion, innovation, and drive to turn a vision into a working business.” - Matt Mickiewicz
The functions of entrepreneur are as follows:
1. Initiating the Business
This is the first function of the entrepreneur, to actually start a business. Firstly the entrepreneur spots business opportunities in the economy he can exploit. Then he develops the project ideas and decides on the scale of the business. Finally, he must obtain the different factors of productions to get the ball rolling.
The entrepreneur has to build up his business dynamically. He must coordinate the factors of production and utilize them in the right proportions. The aim is to generate higher productivity from these factors. So the entrepreneur must get the greatest yield for the lowest cost from these factors of production.
2. Risk Bearing
This is perhaps the most important function of entrepreneurs. The entrepreneurs bear the risks of failure in exchange for the profits of the company. So in dynamic economic model things can change very fast. So the business plans of the entrepreneur should be able to adapt to the changes.
The consumer taste may change, there can be new entrants in the market, taxes may increase, etc. These will all affect the demand and supply of the product. And in turn, the entrepreneur may face some financial losses. Entrepreneurs have to bear these financial risks.
Then there are technological risks as well. These days we make technological advancements every day. So there is a risk that the product may become obsolete. Or more innovative means of production may be developed. There are other risks such as theft, accidents, etc.
In exchange for all these risks, the entrepreneurs enjoy the profits earned by the firm. Profit is their reward for bearing the risks. Unlike some of the other management functions, risk bearing cannot be delegated to the manager. The owner/entrepreneurs have to bear all the risk.
3. Innovation
One of the other important functions of entrepreneurs is to continuously innovate. This innovation can be in the field of new products, new production methods/technology, new business models, exciting and new promotion tactics, exploring new markets, etc. This will help entrepreneurs with the economic growth of the firm.
However, any new innovation or technology comes with its own share of new risks as well. It will be the job of the entrepreneur to manage such risks in exchange for the scope for higher returns and higher profits. Ultimately this innovative spirit of the entrepreneur will lead to advancements in the firm and even the economy as a whole. The most successful entrepreneurs are all great innovators.