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UNIT 1 - ENTREPRENEURSHIP CONCEPT AND FUNCTIONS

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saurav nair

on 26 January 2014

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Transcript of UNIT 1 - ENTREPRENEURSHIP CONCEPT AND FUNCTIONS

UNIT 1 - ENTREPRENEURSHIP CONCEPT AND FUNCTIONS
Promotional functions
Managerial Functions
Innovation
The basic function an entrepreneur performs is to innovate new products, services, ideas and informations for the enterprise.
As an innovator, the entrepreneur foresees the potentially profitable opportunity and tries to exploit it.
Risk taking
The functions of an entrepreneur as risk bearer is specific in nature.
The entrepreneur assumes all possible risks of business which emerges due to the possibility of changes in the tastes of consumers, modern techniques of production and new inventions.
Such risks are not insurable and incalculable. In simple terms such risks are known as uncertainty concerning a loss.
organisation
An entrepreneur has to organize men, material and other resources.
He has to perform the functions of planning, co-ordination and control.
He has to use his leadership qualities to build a team, generate resources and solve problems.
Discovery of an idea
The first promotional function of entrepreneur is the conception of a new idea. He visualizes that there are opportunities for a particular type of business and it can be profitably run.
The idea may be to exploit a new area of natural resources or more profitable ventures in an existing line of business. He develops this idea with the help of technical experts in that field.

Detailed investigation
The entrepreneur will estimate total demand for the product. There may be certain concerns already in that type of business and so he will determine his share of demand. After determining the prospective demand for goods he will think of arranging finances for the venture.
The work of estimation becomes more difficult if the proposed line of business is new. The estimates should be based on proper analysis of different factors. A guess work creates problems later on.
Detail 3
After making sure that the proposition is practical and profitable, the entrepreneur proceeds to assemble the requirements. He persuades some more persons to join hands with him by becoming directors of founder members.

If he has invented something new, he should get it registered in his name. He may also acquire some patent rights. The entrepreneur selects the factory site, decides about plant and machinery and contacts suppliers or raw materials, etc.

Financing the preposition
The entrepreneur decides about the capital structure of the enterprise. The requirements of finances are estimated first. Then the sources from which this money will come are determined.
How much share capital will be issued, the type of the shares to be issued, and the nature of loans, whether debentures or borrowing from financial institutions for a longer period all are finalized

Planning
Planning requires the entrepreneur to have objectives that they set. They will determine in advance how the objectives will be seen to. In the planning stages it is very important that goals are outlined in a clear and concise manner so that the rest of the team can follow how the goals will be met.

Directing
Directing is concerned with carrying out the desired plans. It initiates organized and planned action and ensures effective performance by subordinate towards the accomplishment of group activities. In the words of George R. Terry, “Direction is moving to action and supplying simulative power to the group”.
Motivation
The term motivation is derived from the word ‘motive’ which means a need or an emotion that prompts an individual into action. Motivation is the psychological process of creating urge among the subordinates to do certain things or behave in the desired manner.
FUNCTIONS OF ENTRPRENEURSHIP
Organizing
Organizing is when the entrepreneur delegates certain functions to employees, providing tasks and allocating resources in order to help reach the objectives that were devised in the planning stage.
Leadership
Leading is most important for an entrepreneur because they need to be able to pass their vision on and motivate their employees to see the same goals. Leading will influence employees towards achieving the goals created in the planning stage. Without proper leadership employees may not be able to follow through on the objectives and goals.

Controlling
Leading is most important for an entrepreneur because they need to be able to pass their vision on and motivate their employees to see the same goals. Leading will influence employees towards achieving the goals created in the planning stage. Without proper leadership employees may not be able to follow through on the objectives and goals.

Staffing
The function involves manning the positions created by organization process.
It is concerned with human resources of an enterprise.
Communication
Communication constitutes a very important function of entrepreneur. It is said to be the number one problem of entrepreneur today. It is established fact that entrepreneur spend 75 to 90 percent of their working time in communicating with others.
Supervision is another important managerial function of entrepreneur. After issuing instructions, the entrepreneur has to see that the given instructions are carried out. This is the aim of supervision.
Supervision
Co-ordination is one of the most important functions of entrepreneur. It is essential to channelize the activities of various individuals in the organization for the achievement of common goals.

Every department or section is given a target to be achieved and they should concert rate only their work and should not bother about the work of other organs.

Co-ordination
Commercial Functions
Production
Production is the creation of goods and services. In relation to goods, production is the fabrication of a physical object through the use of men, materials and equipment; whereas, with reference to services, production is the discharge of a function which has some utility.
Finance function is the most important of all enterprises. It remains a focus of all business activities. It is not possible to substitute or eliminate this function because the enterprise fails in the absence of finance.
Finance
Marketing
Marketing is primarily concerned with the movement of goods and services from the producer to the ultimate consumer. It creates place, time and possession utilities.

An enterprise has to improve its product and devise different marketing technique4s to survive in the business. The use of an appropriate marketing mix is also necessary to improve marketing function. The price fixation, channels of distribution and promotional effect to form important marketing strategies.
This function is concerned with people at work and with their relationship with in an organization. It aims to bring together and develop into an effective organization of men and women who make up enterprise.
Personnel
Accounting
Accounting is defined as a systematic recording of entrepreneurial transactions in order to get a true and fair view of the results of the operations of an enterprise and the financial position of an enterprise. It includes:

i) Keeping up to date

ii) Developing an efficient system of communication

iii) Keeping and maintaining records

iv) Developing time and labor saving devices in accounting
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