Why it is important to know some major functions of an entrepreneur and different types of an entrepreneur?
Without a doubt, the world has seen many changes and technology has come in the way that makes living more conducive to our humankind.
It is the entrepreneur, who made those changes and lights up the business world through their innovation. You might know some famous entrepreneurs, but what do they do in real to make their ideas into a successful business.
Almost every successful entrepreneur has similar qualities who put their effort to create a sustainable business model. Do you want to be the founder of such a great idea that disrupts the world?
If so, you will need to know the roles and responsibilities of an entrepreneur before starting your startup company, which would be helpful for you to apply to your firm.
Let’s explore in detail…
Definition
An Entrepreneur is an individual who creates and operates a new Business by managing all the risks to get success.
Entrepreneurs are many types who are innovative, and comes with new Business ideas and work to grow their business.
Entrepreneurs take all the risks and responsibilities to build a Start-up company and strive to make the Business profitable.
The Major Functions of an Entrepreneur
Taking Initiative
The foremost function of an entrepreneur is taking initiative. If one wants to be a successful business person, he/she should initiate the process and stay focused to travel in this long journey.
It is not that easy to kick start the process leaving behind the normal job. If we see all the famous entrepreneurs, they think in a broad perspective in any situation and constantly put their efforts to initiate the process. To stand out from the crowd or to invent new techniques this attitude and mindset are more important than anything for an entrepreneur.
Innovating
Usually, Entrepreneurs think in a creative way, not only at the onset of any project or at starting the Business, but throughout the operations. Since it will be a long-term process to build a company they will be engaged in seeking knowledge, in which they are interested.
Before starting the business, Entrepreneurs amass all the thoughts and knowledge that they gained over time and invest it in Brainstorming the ideas and develop the same.
They are more passionate about what they are doing, which turns their idea into an innovative Business in reality.
Managing
Passionate entrepreneur manages whatever that comes in their way. He/she is responsible to manage activities from the ideation process to product delivery in the market. Entrepreneurs are liable to manage and control the whole system like financial management, risk management, people management, etc… It involves multiple roles like planning, structuring, organizing the business. Let us see these functions in detail in further reading.
Organizing
Organizing is a part of the managerial process. He/she organizes the whole operations in a company by allocating the resources appropriately to the needs of a particular department.
Also, he/she assigns the role of all the employees respective to the company hierarchy and supervises them through the concerned team managers regularly. Organizing all the factors of production in a company will absolutely increase the effectiveness in terms of both money and time.
Leading
To be a successful entrepreneur, it’s important to be a great leader. The entrepreneur plays a role model to the team members. In the team’s perception, entrepreneurs should be an example in problem-solving to achieve a perfect solution.
Communicating with all team members without any partiality is important for the entrepreneurs to get the best work from them with full efficiency. While managing the team, the entrepreneurs will appreciate and reward the employee for their contributions. And also motivates all the team members in hard times.
Decision Making
Decision-making is an important role for every entrepreneur to play in management activities. Making a perfect decision whenever needed is crucial for any entrepreneur to attain their pre-defined goals and objectives.
In hard situations, entrepreneurs are much responsible to decide or select an appropriate course of action that makes significant changes in arriving at the best solution.
Before making a decision, entrepreneurs would gather information, analyze the data and make a perfect choice to work better with the defined problem.
Risk-Taking
Risk-taking is a critical aspect for new entrepreneurs while managing the startup company.
In any uncertain situation, entrepreneurs are bold enough to take any kind of risk to get better outcomes. There might be many challenges and obstacles that would come in the way of running the business. Some of the risk factors associated with the company are
- Financial risk
- Operational risk
- Strategic risk
- Regulatory risk etc…
To make the business more sustainable, entrepreneurs control and manages these risks with a strategy and defeat the challenges.
Contribution To The Economy
Another big responsibility of the entrepreneurs is to contribute to the society and economy of the country. For a business person, it is not the only duty to make a profitable company, instead, they serve the people with a good value.
It will either directly or indirectly impact the economy by creating products or services and by creating job opportunities for the people. From the entire business output, entrepreneurs add value to the gross national income of the country.
Entrepreneurs are part of the nation’s growth, who also brings socio-economic changes among people and improves the standard of living.
Types Of Entrepreneur
Small Business Entrepreneur
Not all entrepreneurs start a big company at an early stage. They will keep going in a step-by-step process. An entrepreneur who starts a business as a sole proprietorship or partnership that is privately owned is considered a small business entrepreneur.
It may be a solopreneur, who runs a business with only a few members say 2-6 members. The total capital and running cost would be less than $10 million that could be funded from friends and family or even from banks.
A small business could be
- Grocery Shop.
- Consulting Services.
- A small manufacturing unit that supplies spares.
- Cottage industry or family business.
Scalable Startup Entrepreneur
A Startup entrepreneur is the one who shifts the focus from all around the world with its disruptive innovation.
It attracts a pool of investors from Venture capital firms and Angel Investors to invest in the scalable business. They solve the big problem in the industry and beats the uncertainty in the market situation.
Many startups fail at the early stages due to funding, management and lack of skilled resources, etc… To avoid such failure in the future and to manage the risks associated with a company, this type of entrepreneur may seek help from other organizations.
The Startup Incubators and Startup Accelerator help the entrepreneurs to develop their businesses through their mentorship program, having said that the idea is viable.
Large Company Entrepreneur
A large company is simply defined as a traditional industry or corporate business that gives the product or service to a huge market.
This type of entrepreneur might not own the company, but brings changes in an organization that will lead to a highly profitable business. This entrepreneur may be the CEO or the general manager who innovates ideas to expand the market in an existing company.
He/she will have a clear vision on the marketing prospects and recommend the strategies to the senior officials in the top-level management.
Lifestyle Entrepreneur
Lifestyle entrepreneurs are the one who makes profit by doing business with their passion and interests. They combine to work with their hobbies in day-to-day business activities.
It makes their lifestyle so esteemed with profit-oriented business and gives personal satisfaction in achieving his desire.
Social Entrepreneur
Social Entrepreneurs work for societal changes by offering products or services that solve a huge problem. They focus on the development of society instead of running behind a profit-making business.
Social entrepreneurs are also known as a philanthropist who dedicates their life in solving many social issues that prevails in a country. These entrepreneurs oftentimes work in collaboration with a non-profit organization and government-funded programs.
Reader’s Insight
Let us know if we missed out on anything in this article Entrepreneur – Definition, Types And Major Functions and share your thoughts in the comment section.