Functions of Entrepreneurs

An entrepreneur is a person who seeks out opportunities and organises and

coordinates the production element. He not only recognises commercial prospects,
but also mobilises other resources such as manpower, capital, machinery, supplies,
and processes. According to some economists, an entrepreneur’s role is to establish
coordination. Risk-taking, enterprise control, change innovation, motivation, and
other associated activities are all part of the corporate enterprise. In fact, an
entrepreneur must perform a combination of these tasks while keeping time and the
surroundings in mind. He must, in fact, explore fresh ideas, demands, and
possibilities in order to  contribute  to  technological  advancement.  A  successful
entrepreneur  perceives a product’s or service’s potential and develops marketing,
production, product development, and organisational policies. He is in charge of the
entire company’s operations. He has a strong ability to take calculated risks and
believes in his own abilities.

An  entrepreneur  performs  all  of  the  necessary  duties  that  are  required  for the
operation and expansion of a business. The flow diagram below can help us
understand this.
Kilby identified thirteen functions of an entrepreneur, several of which overlapped
with managerial responsibilities. Kilby divided these functions into four categories.
The following are some of them:

A.    Relationship of Exchange:

1.    Recognizing market possibilities.

2.    Taking control of limited resources.

3.    Purchasing inputs.

4.    Product marketing and responding to competition. 

B.   Political Administration:

1.    Dealing with the government (concessions, permits, and taxes)

2.    Managing human relations inside the company

3.   Managing relationships with customers and suppliers. 

C.       Management Control:

1.    Budgeting and financial management

2.    Production management

D.   Technology:

1.    Purchasing the factory and supervising its construction.

2.    Manufacturing engineering

3.    Improving the process and the quality of the final output.

4.    Experimenting with novel manufacturing procedures and goods.

These tasks, according to Kilby, can vary depending on the size, kind, and location of
a business, and can be enhanced through training and education. To summarise,
entrepreneurs are responsible for the following tasks:

 
1.    Innovation

One of the most crucial functions of an entrepreneur is innovation. They examine the
current state of affairs in the organisation and attempt to achieve a new level of
equilibrium by experimenting with novel and productive combinations of existing
resources.  They  come  up  with  novel  concepts  and  use  their  management  and
innovative talents to make them a reality. They combine productive components,
bring them together, and contribute to a country’s economic progress.

According to Schumpeter, innovation can take the following forms:

◌     introduction of new items;

◌     adoption of new manufacturing methods;

◌     opening of a new market;

◌     conquest of a new source of raw materials; and

◌     reorganisation of any industry.

Entrepreneurs, according to Robert Wilken, provide five different sorts of change:

1.    Initial Expansion: the manufacturing of commodities from the start.

2.    Subsequent Expansion: the change in the number of commodities produced

after the initial expansion.

3.    Factor  Innovation:  a  rise  in  the  quantity  or  productivity  of  manufacturing
elements.
a)     Financial: obtaining funds from new sources or in new forms.

b)     Labour: obtaining labour from a new source or of a different type; upgrading
existing labour.

c)     Material: obtaining old material from a new source or utilising new material.

4.    Production Innovations: alterations to the manufacturing process.

a)     Technological: the application of a novel manufacturing process.

b)     Organizational: a shift in the structure of interpersonal connections.

5.    Market Innovation: Changes in the size or composition of the market are
examples of market innovation.

a)     Product: the creation of a new item or a change in the quality or price of an
existing item.

b)     Market: the establishment of a new market.

Imagination and creativity are required for innovation. It’s so basic that a guy can’t
call himself an entrepreneur unless he invents something fresh and unique in his
business.

2.    Assumption of Risk

Putting a concept into action does not ensure success. Entrepreneurs take up the risk
of the business they want to start succeeding or failing. Such dangers are
uninsurable. If they materialise, the entrepreneur will be responsible for the loss. As a
result, risk-taking or uncertainty-taking is still the most crucial job of an
entrepreneur, which he seeks to minimise by his initiative, talent, and excellent
judgement.

3.    Idea Generation

Entrepreneurs do not come up with ideas and put them into action right away.
Environmental scanning and market research might help you come up with new
ideas. It is the responsibility of the entrepreneur to produce as many ideas as
possible in order to identify the greatest business prospects that can be pursued as a
commercially viable company endeavour. They consider a number of ideas, put them
to the test using quantitative methodologies, complement them with empirical
evidence, and then choose the best option and put it into practise. The selection of
an idea thus entails the entrepreneurs’ use of research technique, vision, insight,
observation, experience, education, training, and exposure, as well as their vision,
insight, observation, experience, education, training, and exposure. Idea generation
entails deciding on a product and deciding on a project.

4.    Organizing and Management

An entrepreneur gathers numerous production resources, appropriately

organises them, and converts them into a productive unit. An entrepreneur is in
charge of the following activities in relation to the proposed projects:

●      Analysing the business environment (SWOT Analysis)

●      Assessing the viability of a business concept

●      Product Line Selection and Market Research: Market research is the systematic
collecting of data about the product that the entrepreneur intends to make, and
product market research is the next crucial duty of the entrepreneur.

While starting a business, an entrepreneur must conduct continuous market research

to learn the specifics of the intended product, such as demand for the product,
product line selection, alternative product price, client size, and so on.

●      Researching government regulations, rules, and policies.

●      Completing federal paperwork.

●      Determination of Objectives: The entrepreneur’s next task is to establish and

spell out the company’s mission, vision, objectives, and goals, all of which should be
stated clearly. In other words, the entrepreneur should be quite clear about the
venture’s future prospects.

●      Determination of the Venture’s Shape: An entrepreneur’s role in choosing the

venture’s form is equally crucial. The nature of the product, the amount of
investment, the nature of the activities, the types of product, the quality of the
product, the quality of human resources, and other factors must all be considered
when deciding on the type of business. Sole proprietorship, partnership, joint stock
company, and cooperative society are the most common types of ownership groups.

●      Managing Funds: An entrepreneur’s most critical role is fund raising. All of a
company’s actions are dependent on its finances and how well they are managed. It
is the entrepreneur’s job to raise financing both internally and externally.

●      Choosing a Location:

◌     Obtaining Raw Materials Entrepreneurs must discover low-cost, consistent
sources of raw materials, which will enable them to lower production costs and
compete more effectively.

●      Machinery Acquisition: The entrepreneurs’ next task is to obtain the necessary
machinery and equipment for the venture’s launch. He should state the following
details before purchasing the machinery:

(a)  Technology information

(b)  Machine installed capacity

(c)  After-sales service facilities)

●      Manpower Recruitment, Selection, and Placement: While performing this duty,
the entrepreneur must engage in the following activities:

(a)  Determining the organization’s labour requirements

(b)  Establishing a selection method

(c)  Placing the employee

‘Financial planning,’ which transforms all other actions into monetary terms, is
another vital responsibility of an entrepreneur. Despite the fact that an entrepreneur
is more than a manager, he does have some managerial responsibilities. By
managing and controlling the personnel, he manages the day-to-day operations of a
business.

5.    Decision Making

According to Arther H. Cole, the entrepreneur is a “decision maker.” He makes

decisions on a variety of issues, including:

●      The  determination  of  the  enterprise’s  aims,  as  well  as  their  modification
as circumstances demand or make it useful;

●      Developing an organisation, including effective relationships with subordinates

and all employees;

●      Obtaining appropriate financial resources and keeping positive relationships

with current and new investors;

●      The acquisition of efficient technological equipment, as well as its revision as

new machinery becomes available;
●      The creation of a market for the products, as well as the development of new
products to meet or anticipate consumer demand; and the maintenance of good
relations with government officials and the general public.

6.    Leading

As an entrepreneur’s business grows, he or she takes on a new responsibility as a

leader. He takes on the role of a visionary leader. The leading function of the
entrepreneur is to get the most out of his human resources. He needs to instil
teamwork and motivation among his employees. Entrepreneurs must transition from
a command- and-control management style to a coach-and-collaboration style as a
leader.

7.    Managing Growth

The entrepreneur must keep track of the company’s progress. It entails tasks
including establishing and designing appropriate growth strategies, coping with
crises, examining various financing options, and determining the venture’s value.

8.    Support for the Social Environment

Social conventions, culture, values, and beliefs define the social environment.
Changes are difficult to accept in a country’s socioeconomic climate. Entrepreneurs
seek out new sources of materials, new markets, and new opportunities, as well as
new and more profitable organisational structures. This demonstrates their
determination, passion, and energy, and aids in overcoming society’s opposition to
change.

9.    Economic Development

Entrepreneurs help to accelerate the rate of economic development in both

developed and developing countries. They take advantage of the country’s resources
(land, labour, capital, and technology) and make the best use of them in order to
help the country flourish.

An entrepreneur serves a variety of purposes. He starts a business, takes a risk, and

makes a profit. He is a man who is driven by a great desire to succeed. He is self-
assured in his ability to run a business. He takes advantage of chances whenever and
wherever they present themselves.

As you can see from the examples above, being an entrepreneur is a thrilling
prospect! Entrepreneurs are involved in a wide range of activities and face a wide
range of obstacles. Entrepreneurial behaviour, in fact, can be described as
complicated, deliberate, and passionate. However, it is critical for you to understand
the rewards and challenges of becoming an entrepreneur right from the outset
because of these attributes.

Being an entrepreneur Has Its Rewards and Challenges

Rewards:

◌     High degree of autonomy

◌     freedom from restrictions

◌     Ability to put a wide range of abilities and talents to work

◌     Decision-making freedom – Accountability to just oneself

◌     Challenges to face

◌     A sense of accomplishment and pride

◌     Potential for larger financial rewards

Challenges:

◌     Must be able to deal with change and uncertainty: Uncertainty is a necessary
component of any business. Every business owner understands that there is no
return without risk. As a result, the existence of uncertainty is an integral element  of 
our  speculative  and  investment  activities.  When  a  result,  a business owner must
embrace uncertainty and deal with it as it arises in order to be a top leader.

◌     Must make difficult economic decisions: Making difficult decisions is one of the
challenges of being an entrepreneur. However, because opportunities are frequently
disguised as decisions, it’s something that business owners must get used to if they
want to thrive. Of course, the most important decision an entrepreneur will make is
whether or not to start a firm in the first place. This may include foregoing a steady,
full-time salary or reducing the work hours in order to pursue the ambition. Or
deciding which idea to put into a business may be the most difficult decision.

◌     Must be willing to take chances: When an entrepreneur takes risks that their
competitors are unwilling to take, they can rise to the top of their field. The
entrepreneur’s willingness to take risks demonstrates to his or her team that he or
she is a true business visionary and leader who believes in the potential payoff on the
other side. Risk-taking allows and stimulates innovation, which can be a key
difference for a product or service. Risks that fail aren’t always bad. They can
sometimes teach an entrepreneur the most important business
lesson. Failure aids in the development of future business initiatives and can finally
lead to expansion.

◌     Requires a wide range of skills and abilities: Entrepreneurial skills are those that
are commonly associated with being an entrepreneur, yet they may be developed by
anyone. Entrepreneurship typically entails starting and growing your own successful
company, however people with entrepreneurial talents can also succeed in larger
businesses.

Many researchers have looked into entrepreneurial skills, but none have come up
with solid solutions. Some common skills are:

◌     Personal characteristics

◌     Interpersonal abilities

◌     Skills in critical and creative thinking

◌     Practical knowledge and capabilities

●      Must be at ease with the possibility of failure: Every successful entrepreneur has
had their share of setbacks. Failures aid in the development of an entrepreneurial
mindset and provide great consequences. It’s like being knocked down in a boxing
ring and getting right back up, ready to fight again. It’s easy to see failure as a
weakness, but accepting failure as a part of the entrepreneurial path is perfectly
acceptable. Failure can be beneficial if it is viewed as a challenge rather than a flaw.
Every setback is a stumbling block to overcome. Entrepreneurs who succeed work
hard until they succeed. Nothing can stop anyone from achieving the aspirations and
goals if they are no longer afraid of failure. They will be successful as soon as they let
go of the fear.

Barrister