Entrepreneur

An entrepreneur is a person who raises capital, initiates production ideas, and combines all other factors of production in order to produce and render services.

He/she is the organizer who coordinates all other factors of production, so as to ensure output. Entrepreneurs make all the decisions of business activities. The entrepreneur is the one who decides what to produce, how to produce, and for whom to produce. The reward for an Entrepreneur is Profit.

Functions of the Entrepreneur:

1. An Entrepreneur Organizes and Coordinates: Entrepreneurs combine all the factors of production for the maximization of profits.

2. An Entrepreneur Initiates: The entrepreneur plans ahead of time for the production of commodities.

3. Entrepreneurs Direct: The entrepreneur directs what when and how to produce.

4. Risk bearing: The entrepreneur bears the risks of uncertainty which are not insurable.

5. Makes key decisions: The entrepreneur decides the scale and method of production.

6. Raises Capital: It is the duty of the entrepreneur to raise adequate capital (money, machinery, etc) He ensures the smooth operation and success of the business.

7. Fixes Price of Goods: Entrepreneurs fix the price of goods and services, at the level that can give quick turnover and maximum profit.

8. Ensures Effective Management: An entrepreneur ensures that the business is effectively managed, in order to bring out positive results.

9. Entrepreneurs Ensure Efficient Coordination: Entrepreneurs ensure efficient coordination of all the other inputs, which will result in an increase in the volume of production.

Characteristics of Entrepreneurs:

1.  Entrepreneurs determine what to produce, how, and for whom to produce, that is, the initiator of production ideas.

2. An Entrepreneur is the chief employer of labour.

3. Diminishing returns set in overtime.

4. An entrepreneur is the major risk bearer.

5. An entrepreneur’s supply (inputs) is not fixed, it can increase or decrease.

Importance of the Entrepreneur:

1. Entrepreneurs increase the level of employment of people and discourage unemployment. 

2. Entrepreneurs Increase government revenue.

3. They raise the level of growth and development.

4. Entrepreneurs Invest in human capital through training and research.

5. Entrepreneurs fulfil social responsibilities, by donating towards the development of the community or nation.  

6. Entrepreneurs Provide capital for the production of output.