Functions of the Entrepreneur

FUNCTIONS OF THE ENTREPRENEUR: An entrepreneur performs all the functions right from the convencing of an idea up to the establishment of an enterprise. He is an opportunity seeker. He organizes and co-ordinates the factors of production. 1. Generating business idea: Essentially there are two ways of ideas that can be created namely,(1)generating own ideas or (2) developing someone else’s idea. The second one is commonly used because every successful business is a development of an earlier business concept. The first one is a source of opportunity in which one will watchout for business that matches his objectives. 2. Determining business objectives: He should lay down his objectives and should clearly state the nature of business and type of business.he should specify clearly whether the business, which he decided to start, belongs to manufacturing activities or trade or service oriented organization. 3. Product analysis: The next function is product analysis and market research. He should conduct research in order that the data regarding the product, which he likes to manufacture. Because it will gives him the information regarding the demand of the product, supply of the product, price of the product, size of the customers etc. 4. Deciding the form of enterprise: It should be decided by taking into account the factors such as nature of the product, volume of investment ,nature of activities, types of product, quality of product, quality of hr etc. the various forms of organizations are partnership, co-operative societies and joint stock companies. the form of ownership has to be decided first then only the other legal formalities can be carried on to establish the organization. 5. Promoting the enterprise: The next step is undergoing the necessary legal formalities as required under the relevant statue if any to establish an organization. Incase of sole trading and partnership there is no much legal formalities when compared to joint stock companies and co-operative societies. He has to read the relevant statute and fulfil the necessary legal formalities in establishing the enterprise. 6. Raising necessary funds: Finance is the life blood of any business because all the activities of a business depend upon it. Thus he needs funds for purchasing assets, carrying out day to day activities, meeting establishing expense as well. He can raise through internally or externally. should have full

knowledge about various govt sponsored schemes, which enables him to get assistance in the form of working capital, etc. 7. Procurement of machine and material: Machines and equipments are purchased and installed in the initial stage itself. While purchasing he should consider the details of technology adopted, installed capacity of plants, details of manufacturer and supplier, etc. Also he has to find the cheapest and regular sources of supply of raw material. This reduces production cost and will help him to face the competitor boldly. 8. Recruiting men: Recruiting of suitable personality for the various activities of the enterprise is another function. First he has to estimate the need of manpower, then has to lay the selection procedure. Also arrangements should be made for giving training to personnel to the jobs for which they have been recruited. 9. Undertaking the activities: This is the stage of implementing the project. It should be done in a time bound manner.He should perform it as per the schedule. This will enable him to avoid cost and time over run and also competition. The above functions can be broadly categorized into three namely, 1. Risk bearing 2. Organization 3. Innovation.