Question

Explain in detail the various functions of an entrepreneur.

Answer 1

The functions of an entrepreneur are divided into
(a) Promotional functions,
(b) Managerial functions
(c) Commercial functions.

(a) Promotional functions:

(1) Discovery of Idea:

• The first and foremost function of an entrepreneur is idea generation. A person may conceive his own ideas or develop the ideas contributed by others. Ideas can be generated through several ways like own experience and exposure of entrepreneur, keen observation of the environment, education, training, market survey, environmental scanning, and so on.

(2) Detailed Investigation:

• Entrepreneurs should investigate the commercial feasibility of the product proposed to be produced and conduct market studies to ascertain the potential demand for the product.

(3) Mobilisation of funds:

• The entrepreneur has to take steps to mobilize the capital needed to implement the venture. The entrepreneur has to estimate the fixed capital and working capital required for running the project.

(b) Managerial functions:

(1) Planning:

• In this function, the entrepreneur has to lay down the objectives, goals, vision, mission, policies, procedures, programs, budget, schedules, etc., for enabling the venture to proceed towards established destinations.

(2) Directing:

• In this function, the entrepreneur has to motivate, lead, guide, and communicate with subordinates on an ongoing basis in order to accomplish pre-set goals.

(c) Commercial functions:

(1) Production or Manufacturing:

• Under production function, the entrepreneur has to take decisions relating to the selection of factory site, design and layout, type of products to be manufactured, research, and development.

(2) Accounting:

• The entrepreneur has to arrange to prepare trading and profit and loss accounts in order to know the profit or loss incurred out of the operation of the business and prepare a balance sheet to know the financial status of the business.