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Functions of an Entrepreneur
The main motive of an entrepreneur is to maximize profit. For realizing this goal, he performs the following functions.
1. Managerial functions
Management may be defined as the art and science of getting things done through others. It is a process of planning, organizing, staffing, directing, and controlling. Effective management leads the organization towards success through the utilization of resources. The managerial functions of an entrepreneur are mentioned below.
a. Planning:
Planning is predetermining courses of action for the achievement of organizational objectives. An entrepreneur has to decide the future activities at present. It involves deciding what, where, how, when, and how things are to be done. It helps to conduct entrepreneurial activities efficiently and effectively.
b. Organizing:
An entrepreneur has to organize a number of resources. They are capital, labor, technology, etc. Organizing ensures proper outcome from these resources. It is very important to implement the plans for organizing resources effectively.
c. Staffing:
The staffing function of management involves the acquisition, development, maintenance, and motivation of the human resources. Hence, activities in staffing are concerned with seeking and hiring qualified employees. Staffing planning is the foundation of the staffing function. The entrepreneur must have a well-defined reason for needing individuals who possess specific skills, knowledge, and abilities directly linked to the specific job.
d. Directing:
It deals directly with influencing, guiding, supervising, motivating the employees for the achievement of organizational goals. It is that part of managerial function directed towards work efficiency for the achievement of organizational goals. It also involves motivation, leading, and communication.
e. Controlling:
It involves measurement of accomplishment against the standards and correction of deviation if any. The purpose of controlling is to ensure that the activities are moving ahead as per standards. It involves the establishment of standard performance, measurement of actual performance, comparison of actual performance with the standards, and finding out deviation if any for corrective actions.
2. Promotional functions
These functions are related to creating and developing basic infrastructures required for an organization. They include,
a. Developing business idea:
It is the most important function of an entrepreneur. Ideas are developed through previous experience, knowledge, education, facing problems, interaction with experts, etc, Ideas should be creative so that they can be turned into innovation for grabbing market opportunities.
b. Preparation of the business plan:
A business plan is a document about the future of a business. It often integrates functional plans such as production, finance, human resource, and marketing. It demonstrates the feasibility of the prospective business. It guides the entrepreneurs in establishing and operating the business. It serves as the guidelines for future activities.
c. Resource acquisition:
Resources are very important for a business since they are input in the production process. They are capital, manpower, technology, land, etc. They are the foundations of business activities. Hence, they should be acquired and managed effectively by the entrepreneur.
