Functions of an Entrepreneur

A. Entrepreneurial Functions
Innovations
The first function of an entrepreneur is
the ability to introduce new ideas,
products, processes, or business models
into the market. It involves identifying
opportunities for improvement and
creating unique solutions that meet
customer needs.

E x a m p l e : E l o n M u s k ’ s Te s l a ,
revolutionized the automotive industry
by introducing electric vehicles with
cutting-edge technology.
Risk-Taking
Entrepreneurs are willing to take
calculated risks and make decisions with
uncertain outcomes to pursue
opportunities. They understand that the
potential for rewards often comes with
inherent risks.
Example: Richard Branson’s Virgin Group
expanded from a small record store to a
diverse conglomerate encompassing
airlines, media, telecommunications, and
more despite the risks associated with
entering various industries.
Organisation Building
Entrepreneurs are responsible for
building and managing organizations to
bring their ideas to fruition. This
involves assembling a team, creating a
structure, and establishing processes
to ensure the efficient operation of the
venture.
Example: Mark Zuckerberg’s Facebook
started as a small dorm room project
and grew into a global social media
platform with thousands of employees
a n d a c o m p l e x o r ga n i za t i o n a l
structure.
B. Promotional Functions
Investigation of Ideas
Entrepreneur’s function is to systematically
explore and evaluate business ideas to
assess their feasibility and potential. They
gather information, conduct market
research, analyse trends, and evaluate the
viability of their ideas before proceeding.

Example: Before launching Airbnb, the

founders conducted extensive research on
the travel and accommodation industry to
identify the market gap and validate the
concept of peer-to-peer home-sharing.
Detailed Investigation
Once an idea is identified, entrepreneurs
analyse the market, target audience,
competition, and potential risks. They
gather detailed information to
understand the
business environment and make
informed decisions comprehensively.

Example: Jeff Bezos extensively studied

the e-commerce market and its potential
growth before founding Amazon. He
conducted thorough research to identify
the best product categories and built a
robust infrastructure to support the
online retail platform.
Assembling Requirements
It’s another function of entrepreneurs
where they work towards gathering the
necessary resources, including human
capital, technology, raw materials, and
suppliers, to bring their ideas to life. They
carefully select and assemble the required
elements for their venture’s success.

Example: The founders of Warby Parker, an

online eyewear company, assembled a
network of manufacturers, designers, and
suppliers to create a streamlined supply
chain and provide affordable, stylish glasses
to customers.
Financing the Proposition
Entrepreneurs explore different avenues to
secure funding for their ventures. They
develop a compelling business case and pitch
their ideas to potential investors, lenders, or
venture capitalists. They may also use
personal savings, crowd-funding platforms, or
s e e k p a r t n e rs h i p s to f i n a n c e t h e i r
proposition.

Example: Elon Musk’s SpaceX raised

significant capital through private
investments and government contracts to
finance the development and launch of
advanced rockets and spacecraft, enabling
the company to pursue its ambitious space
exploration goals.
Managerial
Function
C. Managerial Function
Planning
Planning is a function of entrepreneurs
where they engage in strategic planning to
set goals, define objectives, and establish a
roadmap for their venture. They anticipate
future challenges, identify opportunities,
and develop strategies to achieve their
vision.

Example: Steve Jobs meticulously planned

the launch of the iPhone, setting clear
goals, designing a comprehensive
marketing strategy, and coordinating the
development process to revolutionize the
smartphone industry.
Organizing
Entrepreneurs organize resources, tasks,
and responsibilities to ensure the
effective execution of their plans. They
create organizational structures, delegate
roles, and establish workflows to
optimize operations.
Example: Larry Page and Sergey Brin, the
founders of Google, established a clear
organizational structure with specialized
teams and departments to manage
various aspects of the business, allowing
for efficient collaboration and innovation.
Staffing
Entrepreneurs use staffing by
identifying talent, recruiting suitable
individuals, and building a skilled
workforce. They recognize the
importance of assembling a team with
diverse skills and expertise to drive the
growth and success of their venture.
Example: Reed Hastings, the co-founder
of Netflix, strategically built a team of
talented professionals in technology,
content creation, and marketing to
disrupt the traditional television
industry and establish a global
streaming platform.
Directing
Directing is another function of
entrepreneurs is to provide leadership
and direction to their teams, guiding and
inspiring them to achieve organizational
goals. They communicate the vision, set
performance expectations, and clarify
roles and responsibilities.
Example: Oprah Winfrey used her
influential platform to direct and inspire
her team at Harpo Productions, fostering
a creative and collaborative environment
that led to the production of successful
television shows and the establishment
of a media empire.
Leadership
Entrepreneurs exhibit
leadership qualities by inspiring and
motivating their teams. They lead by
example, create a positive work culture,
and empower employees to unleash
their potential.
Example: Jack Ma, the co-founder of
Alibaba, demonstrated visionary
leadership by inspiring his team to
embrace e-commerce and transform
the Chinese market. His leadership style
fostered innovation, collaboration, and
a customer-centric approach.
Communication
Entrepreneurs effectively communicate
their vision, goals, and expectations to
their team members, stakeholders, and
customers. They ensure open lines of
communication, listen actively, and
convey information clearly to drive
alignment and collaboration.
Example: Mary Barra, the CEO of General
Motors, emphasizes transparent
communication to foster a culture of
trust and collaboration, enabling the
company to navigate challenges and
drive innovation.
Motivation
E n t r e p r e n e u rs e m p l o y v a r i o u s
techniques to inspire and energize
their team members. They recognize
and reward achievements, provide
constructive feedback, and create a
supportive work environment.
Example: Richard Branson, the founder
of Virgin Group, motivates his
employees by encouraging a work-life
balance, promoting creativity, and
offering opportunities for personal
growth and development.
Supervision
Entrepreneurs engage in the supervision
of their operations, ensuring that tasks
are being performed effectively and
efficiently. They provide guidance,
monitor progress, and intervene when
necessary to maintain quality and
productivity.
Example: Tony Hsieh, the late CEO of
Zappos, implemented a unique
supervisory approach by fostering a
culture of self-management,
e m p o w e r i n g e m p l o ye e s t o ta ke
ownership of their work and deliver
exceptional customer service.
Co-ordination
Entrepreneurs coordinate the activities of
d i f fe r e n t d e p a r t m e n t s , t e a m s , a n d
stakeholders to ensure synergy and alignment.
They facilitate collaboration, resolve conflicts,
and ensure that all parts of the organization
work harmoniously towards common goals.
Example: Phil Knight, the co-founder of Nike,
implemented effective coordination strategies
to synchronize the efforts of design,
manufacturing, and marketing teams,
enabling the company to deliver innovative
products and maintain its competitive edge.
Controlling
Entrepreneurs implement control
mechanisms to monitor progress, evaluate
performance, and ensure that outcomes
align with set goals. They establish key
performance indicators, analyse data, and
make necessary adjustments to maintain
efficiency and effectiveness.
Example: Elon Musk exercises strong
control over Tesla’s production processes,
employing advanced data analytics and
quality control measures to ensure that the
company delivers high-quality electric
vehicles to its customers.
D. Commercial Functions
Production
Entrepreneurs engage in production
activities, which involve the conversion
of inputs into goods or services. They
manage the production process,
optimize efficiency, and ensure the
delivery of high-quality products.
Example: Henry Ford revolutionized the
production process by introducing the
assembly line, enabling mass
production of automobiles such as the
Model T.
Marketing
Entrepreneurs use marketing activities to
promote and sell their products or
services. They conduct market research,
develop marketing strategies, and
communicate the value proposition to
target customers.
Example: Steve Jobs transformed Apple’s
marketing approach by creating a strong
brand image, captivating advertisements,
and innovative product launches that
generated high demand and customer
loyalty.
Finance
E n t re p re n e u rs h a n d l e f i n a n c i a l
functions such as managing funds,
raising capital, and making financial
decisions to support their ventures.
They analyse financial data, develop
budgets, and seek opportunities for
investment and growth.
Example: Elon Musk’s SpaceX secured
substantial funding from investors and
government contracts to finance the
development of reusable rockets and
advance space exploration.
Personnel
Entrepreneurs manage personnel
functions, including recruitment,
training, and performance management.
They build and nurture a talented
workforce, aligning skills with business
needs.
Example: Jeff Bezos prioritized talent
acquisition and development at Amazon,
fostering a culture of innovation and
customer focus through comprehensive
employee training programs.
Accounting
Entrepreneurs oversee accounting
functions to maintain financial records,
track revenues and expenses, and
ensure compliance with financial
regulations. They analyse financial
statements and use financial data to
make informed business decisions.
Example: Sara Blakely, the founder of
Spanx, leveraged her accounting skills to
manage the financial aspects of her
business, tracking costs and profitability
to drive strategic growth.
Conclusion
Entrepreneurs play a crucial role in driving
economic growth and innovation. They
identify opportunities, take risks, and
manage resources to create value. By
developing new products or services, they
solve problems and meet market demands.

Their leadership inspires teams, fosters job

creation, and contributes to societal
progress. Ultimately, entrepreneurs
transform ideas into successful ventures,
significantly impacting both the economy
and society.