king and Uncertainty-Bearing
1. Decision Making:The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell and’ so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs. In brief, he is to make vital business decisions relating to the purchase of productive factors and to the sale of the finished goods or services.
2. Management Control:Earlier writers used to consider the management control one of the chief functions of the entrepreneur. Management and control of the business are conducted by the entrepreneur himself. So, the latter must possess a high degree of management ability to select the right type of persons to work with him. But, the importance of this function has declined, as business nowadays is managed more and more by paid managers.
3. Division of Income:The next major function of the entrepreneur is to make necessary arrangement for the division of total income among the different factors of production employed by him. Even if there is a loss in the business, he is to pay rent, interest, wages and other contractual incomes out of the realised sale proceeds.
4. Risk-Taking and Uncertainty-Bearing:Risk-taking is perhaps the most important function of an entrepreneur. Modern production is very risky as an entrepreneur is required to produce goods or services in anticipation of their future demand.Broadly, there are two kinds of risk which he has to face. Firstly, there are some risks, such as risks of fire, loss of goods in transit, theft, etc., which can be insured against. These are known as measurable and insurable risks. Secondly, some risks, however, cannot be insured against because their probability cannot be calculated accurately. These constitute what is called uncertainty (e.g., competitive risk, technical risk, etc.). The entrepreneur undertakes both these risks in production.
5. Innovation:Another distinguishing function of the entrepreneur, as emphasised by Schumpeter, is to make frequent inventions — invention of new products, new techniques and discovering new markets — to improve his competitive position, and to increase earnings.
Myths About Entrepreneurs-:
1. Entrepreneurs don’t have a personal life-: Lots of people think that entrepreneurs work 24 hours a day, 365 days a year. Working nonstop means that you won’t have time for your family, friends, and leisure activities.While it’s true that entrepreneurship can take grueling hours and commitment, it’s not true that you can’t have a personal life.
2.Entrepreneurs Are High Risk Takers-: Entrepreneurs, Rye states, are often thought of in terms of the risk they assume. Even the dictionary describes an entrepreneur as one who assumes business risks. However, like all prudent business people, entrepreneurs know that taking high risks is a gamble. Entrepreneurs are neither high nor low risk takers. They prefer situations in which they can influence the outcome, and they like challenges if they believe the odds are in their favor.
3.Entrepreneurs are born, not made-:This is the same as saying that you can't teach entrepreneurship. According to management guru Peter Drucker, entrepreneurship is a discipline that can be learned. Passion and persistence may be in your genes, but it takes work to develop the skills that entrepreneurs have.
4.You need a business plan to succeed-:Sure, investors and lenders want to see a business plan before handing you a wad of cash, but if you don't need these resources at start up, you may be able to launch your business based on the results of a feasibility analysis and then get some traction with customers.
5. Entrepreneurs are in it for the money-:some entrepreneurs do think that making money is what it's all about, but the #1 reason that most entrepreneurs start businesses is independence -- the ability to create something they can call their own instead of working for someone else. Entrepreneurs want to con