The compilation of these Entrepreneurship Development Notes makes students exam preparation simpler and organised.
Role of Entrepreneurs in Relation to Enterprise
What is the role of a parent in their child’s growth? The answer is a bit obvious, isn’t it? Similarly, the role of entrepreneurs in the development of an enterprise is like the role of a parent in the growth of their children. Let us take a look.
Role of Entrepreneurs
A lot of hard work goes into starting and eventually expanding an enterprise. This hard work starts with the entrepreneur and trickles down the entire organization. But this is a very broad definition and does not really appreciate and highlight the actual role of entrepreneurs with respect to their enterprises.
So to explain it in a better way, let us break it down into points about how an entrepreneur is vital to the enterprise.
Initiator
The entrepreneur is the one who initiates the process of creating an enterprise by coming up with the idea for the business and planning out how to turn that idea into a reality.
Risk Taker
In an enterprise, the entrepreneur, being the owner, is the biggest risk-taker. He is the one who finds the capital to back up his idea and also the person who is accountable in the face of the failure of that particular idea.
Reduces Risk
It is also one of the most important roles of entrepreneurs to reduce the risk of an enterprise failure by bringing in people that can help the organization grow. These people can be shareholders or investors that have a stake in the company and therefore are motivated to help the company succeed.
Allocator
An entrepreneur procures and allocates various resources in the organization. The most important of these resources is manpower. The entrepreneur is responsible for hiring an efficient staff to help him carry out his business. This is important because a good manager can take a business to new heights, while a bad manager can destroy the business. He is also responsible for creating an organizational structure and departments for the more efficient functioning of the enterprise.
Adhering to Legal Norms
To ensure that the enterprise adheres to legal norms and policies, such as obtaining a license is also the duty of the entrepreneur. Not pertaining to these can mean serious legal consequences for the enterprise. These could be in terms of financial losses for the organization or something even more serious such as shutting down of an enterprise.
Forecasting
Last but far from least, the role of entrepreneurs involves acting as a forecaster. The enterprise works in a business environment and is affected by changes occurring in various aspects of this environment. It could be internal, such as strikes, machinery breakdowns, budget cuts, etc. or these could be external, such as legal policy changes, political or social unrest, technological advancements, etc. An entrepreneur must be able to correctly forecast these changes and prepare the organization to deal with these changes.
Example:
Question:
Is an entrepreneur the same as a manager?
Answer:
There are a lot of similarities between an entrepreneur and a manager with respect to the allocation of resources, decision making, and guiding the employees. so, in a way, every entrepreneur can be a manager. However, the reverse is not necessarily true.
This is because, essentially, to be an entrepreneur, you must be the owner of the business, and in a lot of cases managers work for someone else’s business.