The following are the functions of an entrepreneur :
(i) To Initiate a Business Venture and Coordination : The first and most important task of the entrepreneur is to start the business by collecting various factors of production. Entrepreneurs pay costs for various factors of production, remuneration for their services, and that which is surplus, is the factor payment that they receive. If there is no extra balance, then they do not get any factor payment.
(ii) Risk Bearing and Uncertainty : Many economists have emphasized that the most significant task of an entrepreneur is to bear the risk and uncertainty. According to F.H. Knight, certain risks (Insurable risks) like risks of fire, thefts and accidents, etc. do not cause uncertainty and thus do not give rise to profits. It is non-insurable risks (like risks relating to price decision, output decision, and product variation decision, etc.) that involve uncertainty and give rise to profits.
(iii) Innovation : It is the true function of the entrepreneur. In broad sense, innovation includes introduction of new production methods, utilization of new sources of raw materials, adoption of new forms of organization, introduction of new products and discovering new markets.
