functions of an entrepreneur

functions of an entrepreneur

Entrepreneurs perform a number of functions from the stage of starting a business to its level of success. These functions include:
1. Planning
This is the first step in setting up an enterprise. The planning process involves:

• Scanning for the best suitable idea
•  Selection of the product line
• Determining the type of business organization (individual or partnership or corporate)
• Estimation of capital resources
• Selection of location/site
• Studying the government policies and regulations
• Studying the availability of labour force
• Studying of the market and marketing strategy to be adopted

2. Organization
An entrepreneur co-ordinates, assembles and supervises other factors of production - land, labour and capital during the promotion and performance stage for optimum utilization of resources.
3. Decision-making
As a decision maker, an entrepreneur takes various decisions regarding the following matters:

• Determining the objectives of the business enterprise
• Procurement of machinery, material, men, etc
• Acquisition of efficient technology and new equipment
• Development of a market for the product

4. Management
This involves the operations of the venture and managing of day-to-day activities. It involves direction of men, machine, material and other resources.

5. Innovation

This may involve:

• Launching of a new product on the market
• Introduction of new technology in production
• Creation of new markets
• Discovery of new and better sources of raw materials

6. Risk bearing
An entrepreneur undertakes the responsibility for loss that may arise due to un foreseen circumstances in the future.

7. Uncertainty bearing

There are some risks which cannot be insured against and incalculable, for example uncertain trends in the market.

Student Activity 3

1. Outline the functions of an entrepreneur.

Benefits and challenges of an entrepreneur

Entrepreneurs enjoy a range of benefits for being in business. At the same time, they are confronted by a range of challenges in the course of doing their work as entrepreneurs. Table 1.1 shows the benefits entrepreneurs enjoy and the challenges they face.

Table 1.1 Benefits and challenges of being an entrepreneur

Benefits	Challenges
1. Social recognition	1. Long and irregular hours of work
2. Increased income	2. Low level and insecurity of income
3. Improved standard of living	3. Low life style due to hard and demanding work<
4. Flexibility in decision-making	4. Potential loss of resources invested in business
5. Developing self-confidence
6. Self-employment

Challenges refer to the major activities undertaken in a business, whereas tasks are specific pieces of work that can be done to meet the challenges. Examples of challenges and tasks are given in Table 1.2 below.

Table 1.2 Tasks and challenges in business

Challenges	Tasks undertaken to meet challenges
Raising capital	Applying for a loan Sourcing credit facilities from suppliers Reducing expenditure so as to save, etc.
Marketing goods/services	Advertising Costing and products Market assessment, etc
Managing funds	Budgeting and budget control Record keeping, etc
Maximizing profits	Controlling costs Sales promotion, etc
Acquiring stock	Contacting suppliers Choosing best suppliers Transporting goods Storage, etc Installing effective and efficient production processes producing high quality products

At times, many tasks can be undertaken in meeting a challenge. Table 1.2 above shows some of the challenges and the related tasks in business.

Student Activity 6

1. Interview a local entrepreneur.
(a) What benefits do entrepreneurs enjoy?
(b) What challenges do entrepreneurs face?
(c) What mechanisms do entrepreneurs use to overcome those challenges?