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Saturday, 1 September 2018

Entrepreneur


Role of Entrepreneur

Entrepreneur is a person who conceive an idea to do a business, co-ordinate and correlate the other factors of production. He starts the business, organise resources and supervise it. He pays to all the factors of production in advance of the sale of goods.

  1. Rent to landlord
  2. Wages to worker
  3. Interest to lender

After payments to all factors, there may be surplus left or not. It is a risk which is undertaken by an entrepreneur. Both possibilities of loss or profits exist in business. In case nothing is left after payments, his business is miscarried and hence may be shut down. It is also possible that huge surplus is left after payments. This profit goes to the entrepreneur. He is prepared to accept all the situations which may arise in due course of business.

Role of entrepreneur
The Entrepreneur


Innovative Character

The entrepreneur’s character should be innovative. He must something do which is different from the current scenario. Obviously if the entrepreneur is earning smart profits, he is innovative definitely. He is doing and thinking something new to attract customers.

Further innovation means a lot of things. Innovation may be of following types:

  1. Introduction to new method of production.
  2. Introduction of a new commodity.
  3. Making different of an old product.
  4. Discovering new materials.
  5. New techniques in management of business.

A main character inherent in decision making is uncertainty. The entrepreneur thus finally a risk bearer person.

According to J.A. Schumpeter, a German economist

“The entrepreneur can change the direction of an economy”.

Thus the entrepreneur’s function may be summarised as follows

  • Initiates, mobilise necessary productive resources.
  • Risk bearer
  • Innovator.

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