Definition: an entrepreneur can be defined as the factor of production that co-ordinates and organizes other factor of production (Land, Labour and Capital) in order to produce goods and services.
functions of the entrepreneur
The entrepreneur bears the risks and takes major decisions of the business.
He risks his capital in setting up the business with the aim of obtaining maximum profit.
In summary, the entrepreneur is the person who co-ordinates
, controls and organizes the process of production in order to make maximum output at minimum cost thereby making profits.
He is the M.D or CEO in an executive office. The reward for entrepreneur is profit.
Characteristics of entrepreneur
he risks his capital in the course of investment and whatever comes out of it, whether good or bad, he has to take.
Organization: he organizes productive resources for the production of goods and services.
Decision making: he takes decisions in the course of production, which can bring out better results.
Controls other factors: he has absolute control over other factors of production, e.g. their combinations in order to get maximum production at minimum cost.
Importance of entrepreneur
Decision making: The entrepreneur takes decision during production process. He may take decision on what to produce, quantity to produce, what to supply and at what price to sell. Good decisions taken will bring out good results.
Provision of capital: The entrepreneur is responsible for the provision of capital for business. The availability of enough capital will determine the level of success of the business.
His capital may include physical cash, motor vehicles, building, plants and machinery.
Risk bearing: the entrepreneur bears the risk associated with the business. Lots of risks are involved in all business set up, e.g. stealing, bad weather and fire. When his goods are in high demand, he makes profit but when the reserve is the case, he suffers losses.
Efficient management: The entrepreneurs also ensure efficient management of the business by combining the other to maximize production and profits.Effective organization: the entrepreneur also ensures an affective organization in the business. He ensures that he has qualified personnel and assigns duties to them. He supervises them to ensure effective operations in the business.