Last updated on September 19th, 2024 at 05:01 am

Curious about what are the functions of entrepreneur? AAMcourses is here to guide you. In this article, we will discuss the seven important functions that entrepreneur has to perform.

As entrepreneurs are new and starting from scratch, they have more responsibilities to complete. They have to perform all the functions of every department of their new business. Before we dive deeper into the functions of entrepreneur, let’s take a look at what an entrepreneur is.

What is an Entrepreneur?

Entrepreneur refers to an individual who has decided to pursue their own business instead of working for someone else. Entrepreneur chooses to run their own business, may it be small-scale or large-scale. An entrepreneur is someone who bears all the risks of a business to achieve all the rewards.

Entrepreneurs are individuals who have their own ideas for a business, and they act on commercializing these ideas. This idea may exist in the market, or it may not. The entrepreneur may have come up with new and more effective operational methods. Entrepreneurs introduce their new idea to the market and plan on earning from it.

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Now that we have the basics all cleared up, let’s move on to the functions of entrepreneur.

Functions of Entrepreneur

As a business owner, the entrepreneur has to assume all responsibility for them. As a business owner, they have many functions they need to perform. Let’s study these seven functions of entrepreneur in detail.

Innovation 

Innovation is the central aspect that creates an entrepreneur. Entrepreneurs are individuals who identify market problems and opportunities and develop innovative solutions to those problems. Once they understand the problem, they study how to solve the problem, and then they commercialize the solution.

Entrepreneurs think of new, creative ideas or improve existing ones to satisfy the market shortcomings. There are five fields in which an entrepreneur can use their ideas to innovate. They are mentioned below.

• Introduction of new product or service
• Introduction of new or improvised operational method
• Opening a new market
• Introduction to a new source of supply in the market
• Re-arranging existing industry

Bearing Risk

This is one of the most functions from the list of 7 functions of entrepreneur. As a business owner, the entrepreneur bears all the risks associated with commercializing their business idea. Responsibility for the procured funds, the chance of fewer sales, market risk, etc., the entrepreneur has to take responsibility for everything and then continue their business.

Management

As an entrepreneur, you have to assume the managerial roles as well. The entrepreneur is responsible for all the managerial activities – planning, organizing, staffing, controlling, and directing the business. For this role, the entrepreneur has to do the following things.

• Market research
• Decide objective
• Decide on the nature of business
• Procuring funds
• Procuring raw material
• Establishing assets
• Recruiting workforce

Decision Making

The next on the list of functions of entrepreneur is Decision making. Every entrepreneur and business owner are decision-maker by their very nature. The entrepreneur has to make decisions regarding every aspect of the business. Deciding the business objective, making up policies, making employment decisions, procurement decisions, deciding on the tools and techniques to be used, etc., all must be determined by the entrepreneur.

Leader

One of the most crucial functions of entrepreneur is to be a leader. Entrepreneurs are the leader of the business by their very nature. As the business moves forward, this role gets more and more critical. Entrepreneur has to ensure that their employees are motivated. They have to create an effective working environment and ensure that there are training programs for employees. As a leader, the entrepreneur must ensure they can communicate their vision to the team.

Managing Growth

With a growing business, the responsibility of the entrepreneur also grows. Entrepreneurs must ensure that they are developing new strategies that suit their business according to the growth stage and market trends.

Economic Development

An entrepreneur and their business ultimately contribute towards the economy of the country. Entrepreneurs create opportunities for the employment of people. When they launch a business, the open employment spots have to be filled with people, which will contribute to increasing the country’s employment rate.

With the new and innovative products or services of the business, entrepreneurs also contribute towards a better standard of living for the nation.

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FAQs

Closing Statement

An entrepreneur is every nation’s underdog. It’s the hidden potential that is waiting to explode into the market and capture everything. Every country has come to realize its importance and started to support entrepreneurs and their new venture plans for their country’s growth.

Every entrepreneur has the same responsibility that they have to carry initially. These 7 functions of entrepreneur cover the whole topic of who an entrepreneur is and what they do. If you have any doubts or suggestions, let me know about them in the comment section.