Functions of an Entrepreneur

Functions of an Entrepreneur:

1. Recognizing Profitable Investible Opportunities:

Considering a new and most promising and profitable thought or capturing a new idea obtainable in the market is the foremost function of an entrepreneur. This is termed as recognizing profitable investible chances.

2. Deciding the size of unit of production:

An entrepreneur has to choose the size of the unit – whether big or small based upon the nature of product and the level of competition in the market.

3. Deciding the location of the production unit:

A rational entrepreneur will always place his unit of production closer to both factor market and the end-use market. This is to be completed in order to bring down the delay in production and distribution of products and to decrease the storage and transportation cost.

4. Recognize the optimum combination of factors of production:

The entrepreneur, subsequent to having decided to begin a new venture, takes up the task of hiring factors of production. Moreover, he decides in what combinations he must combine such factors; therefore maximum output is formed at minimum cost.

5. Making innovations:

According to Schumpeter, fundamentally an entrepreneur is an innovator of new markets and new methods of production. A new market raises the sales volume while a new cost cutting production method will make the product cheaper. This will in return raise the volume of sales and profit.

6. Deciding the reward payment:

The factors employed in production have to be rewarded on the basis of their productivity. Evaluating the productivity of the factors and the payment of reward is the vital function of an entrepreneur.

7. Taking Risks and facing uncertainties:

According to Hawley, a business is nothing however a bundle of risks. Products are generated for future demand. The future is doubtful. The investments are made in nowadays. This is the severe risk in production. One who is ready to acknowledge the risk becomes a successful entrepreneur. A cautious entrepreneur forecasts the future risks technically and take suitable decision in the present to conquer such risks. According to Knight one of the significant functions of entrepreneur is uncertainty-bearing.

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