Meaning of Entrepreneurs
the term ‘entrepreneur’ has been defined in various ways-a risk taker, a resource assembler, an organisation builder, an innovator, and so on. Truly speaking, an entrepreneur is all combined into one. He introduces new ideas, carries on new activities, coordinates the factors of production and decides how the business should be run. He has vision, originality of thought and ability to take calculated risks. Innovation is the specific tool of entrepreneur, the means by which they exploit change as an opportunity for a different business or service.
According to Peter F. Drucker,” An entrepreneur as one who always searches for change, responds to it exploits it as an opportunity.”
Characteristics of Entrepreneurs
- Innovative ability : An entrepreneur has a creative ability to search new opportunities. He keeps on trying new ideas.
- Desire to accomplish : The entrepreneur has a strong desire to accomplish something. he wants to achieve a goal that poses reasonable challenge to him.
- Energetic activity : The entrepreneur exhibits a high level of energy than an average person and spends a large proportion of his time in finding out novel ways of getting done the set task.
- Risk taking : The entrepreneur takes moderate risks to achieve his goals. he is not a gambler; he undertakes risks consciously.
- Perception of god ideas : It involves collecting and analyzing facts and thereafter falling upon his own self-confidence for accomplishing the task.
- Future-orientation: the entrepreneur plans and thinks for the future. He anticipates possibilities that lie beyond the present.
- Desire for responsibility : The entrepreneur is ready to be personally responsible for the results of his decisions.
- Skill in organizing : Entrepreneurs have remarkable skill in organizing work and human resources. They are able to make productive use of all the resources.
- Flexibility : Achievement-oriented entrepreneurs are adaptable and flexible to adjust with the changed circumstances.
- Self-confidence : The entrepreneur has his own individuality and possesses great amount of confidence in himself. This helps in trying out new ideas.
Functions of Entrepreneurs
- Innovator : An entrepreneur is basically an innovator who tries to develop new technology, products and markets, Innovation implies doing things in new ways or doing new things. It may involve introduction of new techniques, introduction of new goods and services, developing a new market, etc. The entrepreneur uses his creative faculties to do new things and exploit opportunities in the market. He does not believe in status quo, he wants change.
- Bearer of Risks and Uncertainty : An entrepreneur assumes business risks and is prepared for the losses that may arise because of unforeseen contingencies in future. This willingness to take risks allows him to take initiatives in doing new things or trying new methods of production. This helps in satisfying their ‘achievement need.
- Promoter : Traditionally, an entrepreneur undertakes the risk of setting up a small enterprise as a sole proprietor. But these days, may entrepreneurs have assumed the role of promoters of large joint stock companies. As promoters, they conceive the business idea, conduct feasibility studies, take steps to get the company registered and raise capital for the company from the public and other sources. In such cases, the distinction between an entrepreneur and a promoter is of academic interest only. Thus, the persons who start a new basis as a role proprietor or partnership firm are known as entrepreneurs. But those connected with the incorporation of a company are often known as ‘promoters’. The promoters complete all legal formalities to get a company registered and also raise capital from the public.
- Supplier of Capital : In several cases, entrepreneurs start business enterprises with their own financial resources. Thus, they supply initial capital to the business and undertake business risks. However, technocrat entrepreneurs approach financial institutions to raise “risk capital’ for their ventures or enter into partnership with those who can contribute capital to the business.
- Manager : In most of the cases, small entrepreneurs also assume the managerial role. As a manager, the entrepreneur plans, organised, directs and controls the activities of the business, He loads the workers coordinates their operations and motivates them for higher productivity. However, when the size of business grows considerably, the entrepreneur can employ professional managers for effective management of the business.
Distinction between Entrepreneurs and Manager
- Venture Creation : An entrepreneur often sets up a new venture while a manager only runs an existing venture.
- Innovation : An entrepreneur introduces new ideas to increase profits and is, therefore, an innovator. On the other hand manager runs the business on established lines and oft maintains the status quo. An entrepreneur is a change age whereas a manager is the product of change. Entrepreneurs involves combining to initiate changes in production whereas management involves combining to produce.
- Bearing of Risk : An entrepreneur assumes risk of economic uncertainties involved in the enterprise. A paid manager, on e other hand, undertakes no risk.
- Status : An entrepreneur is his own boss and enjoys an independent status. In contrast, a manager is an employee and dependent on the owner.
- Reward : For bearing risks, an entrepreneur earns profits which may fluctuate widely from one time period to another. But the reward of a manager is the salary which is relatively fixed and regular.