Today, In this article we discussed about an Entrepreneur and its definition, functions, type and their behavior and what are the qualities a person to need become a success entrepreneurs.
Entrepreneur is a person of telescopic faculty drive and talent who perceives business opportunities and promptly seizes them for exploitation.
History of Entrepreneur
The Word “entrepreneur” is derived from french word Entreprendre which was used to designate an organizer of musical or other entertainments. Later in 16th century it was used for army leaders. It was extended to cover civil engineering activities such as construction in 17th century. But An Irishman living in France Richard Cantillon used the term entrepreneur to refer to economic activities.
Schempeter told entrepreneur who believed that an entrepreneur was a dynamic agent of change,that an entrepreneur was a catalyst who transformed increasingly physical,natural and human resources into correspondingly production possibilities.
Definition of Entrepreneur
As said above entrepreneur is used in various ways and various views
According to Richard Cantillon “An entrepreneurs is a person who buys factor services at certain prices with a view to selling its product at uncertain prices.” Its called entrepreneur is a bearer of risk, which is non-insurable.
According to F.A.Walker “Entrepreneurs is one who is endowed with more than average capacities in the task of organizing and coordinating the factors of production,i.e. land, labour, capital and enterprises.
Gilbraith said “An entrepreneurs must accept the challenge and should be willing hard to achieve something”
E.E.Hagen defines that “An entrepreneurs is an economic man who tries to maximize his profits by innovation, involve problems solving and gets satisfaction from using his capabilities on attacking problems.”
International labour Organization defines “Entrepreneurs as those people who have the ability to see about evaluate business opportunities, together with the necessary resources to take advantage of them and to initiate appropriate action to ensure success.”
Classified of Entrepreneur
Entrepreneurs views are mostly classified into three groups whose given below:-
Entrepreneur as Risk Bearer :- Richard Cantillon called entrepreneurs as a risk bearer. P.H. knight described entrepreneurs to be a specialized group of person who bear uncertainty. He made distinction between certainty and risk. A risk can be reduced through the insurance principle, where the distribution of outcome in a group of instance is known, whereas uncertainty cannot be calculated.
Entrepreneur as an organizer :- According to J Baptist says “an entrepreneur is one who combines the land of one, the labor of another and capital of yet another, and thus produces a product. Say made distinction between the role of capitalist as a financier and the entrepreneur as an organizer. This concept of entrepreneur is associated with the functions of coordination, organisation and supervision.
Entrepreneur as an Innovator :– Josheph a schempeter in 1934 assigned a crucial role of innovation to the entrepreneur. The introduction of new combination according to him, may occur in any of the following forms.
- Introduction of new product in the market.
- Use of new method of production, which is not yet tested.
- Opening of new market.
- Discovery of new source of raw materials.
- Bringing out of new form of organization.
He considered economic development as a dynamic change brought by entrepreneurs by instituting new combinations of factors of production. i.e., innovations.
Functions of an Entrepreneur
Entrepreneur has to perceive business opportunities and mobilize resources like man, money, machines, materials and methods. He also has to perform function for successful running of his enterprises.
The following are the main functions of Entrepreneurs.
1. Idea Generation : The first and the most important functions of an entrepreneur is idea Generation. Idea Generation implies product selection and project identification.
Idea Generation is possible through vision, insight, keen observation, education, experience, and exposure.
This needs scanning of business environment and market survey.
2. Determination of Business objectives : The Entrepreneur must be clear about that nature and type of business. Entrepreneur has to state and lay down the business objectives. Objectives should be spelt out in clear terms.
3. Rising of funds : All the activities of the business depend upon the finance and hence find rising is an important function of an entrepreneur.
An Entrepreneur can raise the find from internal sources as well external sources. He should be aware of different sources of funds.
He should also have complete knowledge of government sponsored schemes such as PMRY, SASY,REAP etc., in which he can get government assistance in the form of seed capital, fixed and working capital for his business.
4. Procurment of Machines and Materials : Another important functions of an Entrepreneur is to procure raw material and machines. Entrepreneur has to identify cheap and regular sources of raw materials which will help him to reduce the cost of production and he should specify the technical details and the capacity.
He should consider the warranty, after sales services facilities etc. before procuring machineries.
5. Market Research : Market Research is the systematic collection of data regarding the product which the entrepreneur wants to manufacture.
It has to undertake market research persistently to know the details of the intending product,i.e., the demand of the product, size of the market/customers, the supply of the product, competition, the price of the product etc.
6. Determining form of Enterprise : Entrepreneur has to determine form of enterprises depending upon the nature of the product, volume of investment etc.
The forms of ownership are sole proprietorship, partnership, joint stock company, co-operative society etc.
Determination of ownership right is essential on the part of the entrepreneur to acquire legal title to assets.
7. Recruitment of Manpower : To carry out this function an entrepreneur has to perform the following activities.
- Estimating man power requirement for short terms and long term.
- Laying down the selection procedure.
- Designing scheme of compensation.
- Laying down the serve rules.
- Designing mechanism for training and development.
8. Implementation of the project : Entrepreneur has to develop schedule and action plan for the implementation of the project. The project must be implemented in a time bound manner.
He has to organize various resources and coordinate various activities. This implementation of the project is an important function of the Entrepreneur.
All the above functions of the entrepreneur can precisely be put into three categories of innovation, risk bearing, and organizing and managing functions.
Type of Entrepreneur
Today’s various types of entrepreneurs are found engaged in different types of activities, not only in industrial activities but also in agriculture and commercial activities.
Entrepreneurs are classified in a number of ways as discussed below :-
There are mainly four types of entrepreneurs which classifies by Danhof.
1. Innovative Entrepreneur :- This category if entrepreneur is characterized by smell of innovativeness. This type of entrepreneur, sense the opportunities for introduction of new ideas, new technology, discovering of new markets and certain new organizations.
Such entrepreneurs can work only when certain level of development is already achieved and people look forward to change and improve.
Such Entrepreneur are very much helpful for their country because they bring about a transformation in life style.
2. Adoptive or Imitative Entrepreneur :- Such Entrepreneurs imitate that existing entrepreneur and set their enterprise in the same manner. Instead of innovation, may just adopt the technology and methods innovated by others,
Such types of entrepreneur of entrepreneur are particularly suitable for under developed countries for imitating the new combination of production already available in developed countries.
3. Fabian Entrepreneurs :- Fabian Entrepreneur are characterized by great caution and skepticism, in experimenting any change in their enterprises.
They imitate only when it becomes perfectly clear that failure to do so would result in a loss in a loss of the relative position in the enterprises.
4. Drone Entrepreneurs :- Such entrepreneur are conservative or orthodox on outlook. They always feel comfortable with their old fashioned technology of production even though technologies have changed.
Some more types of entrepreneurs listed by behavior scientists are given below :-
a) Solo Operators :- These are the entrepreneurs who essentially work alone, introduce their own capital and if essential employ very few employees.
b) Active Partners :- Such entrepreneurs jointly put their efforts and resources. They actively participate in managing the daily routine of the business concern.
Entrepreneurs who only their funds but not actively participate in the business are called simply “Partners”.
c) Inventors :- Such Entrepreneurs are creative in character and feel happy in inventing new products, technologies and methods of production.
Their basic interest lies in research and innovative activities.
d) Challenge :- According to such entrepreneurs, if there is no challenge in life, there is no charm in life. He plunge into industry business because of the challenge it presents.
When one challenge seems to be met, they begin to took for new challenges. They convert odds and adversities into opportunities and make profit.
e) Buyers :- These are the entrepreneurs who do not like to face the hassles of building infrastructure and other facilities.
They simply purchase the existing one and by using their experience and expertise try to run the enterprise successfully.
f) Life Timers :- Such Entrepreneurs take business as an integral point of their life. Family enterprises, which mainly depend on exercise of personal skill, fall in this category.
g) Industrial Entrepreneurs :- Such Entrepreneurs engage in manufacturing and selling products.
h) Service Entrepreneurs :-Such Entrepreneurs engage in service activities like repair, consultancy, beauty parlour etc,. where entrepreneurs provide service to people.
i) Business Entrepreneurs :- They are also called as trading entrepreneurs which buy and sell goods.
j) Agricultural Entrepreneurs :- They engage themselves in agricultural activities like horticulture, floriculture, animal husbandry, poultry etc.
k) Corporate Entrepreneurs :- Corporate Entrepreneurs undertake their business activities under legally registered company or trust.
l) Rural Entrepreneurs :- Entrepreneur’s selecting rural based industrial opportunity in either khadi air village industries sector or in farm entrepreneurship are regarded as rural entrepreneurs.
m) Woman Entrepreneurs :- According to government of India an entrepreneurs is defined as an enterprise owned and controlled by 16 a woman and having minimum financial interests of 51% of the capital and giving at least 51% of employment generated in the enterprise to woman.
Woman entrepreneurs play an important role in economy especially in rural areas.
Now, we called Entrepreneur is not just a owner or financier of any enterprises but it is main pillar of any organization. It is a person who specializes in taking judgmental decision about the benefits and profits of organization.
Entrepreneurial Behavior
This studies show a consistent profile of entrepreneurial behavior that may be opertionalized. They have a need for higher achievement and have a higher propensity for the following.
- Risk taking
- Identifying and seizing opportunity
- Decision making beyond past and the present trends
And we mentioned some facts whose summarized entrepreneurial personality
- Focusing on results, not activity
- Questioning the status quo
- Motivated by problem solving and effecting change and innovation
- Frustrated by bureaucratic systems
- Ambitious and competitive
In the last words, Entrepreneur is a undertaker of business and entire business is depend on its behavior, decision and their planning. We can also say that the wrong decision of an entrepreneur can sink the entire business and no one can become an entrepreneur without risk and knowledge.
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