Page 98 - AI Ver 1.0 Class 10
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• Financing: An entrepreneur determines the amount of capital needed to start a new venture and to run it
smoothly till the time the business has not started gaining profits. This capital can be raised by investing his
personal savings, taking a loan from the banks and in case it is a big venture then can be through shares and
debentures. After finalizing with the source of money proper planning of the finance in terms of short term and
long-term goals are very important.
Managerial Functions
An entrepreneur needs to perform the following managerial functions:
• Planning: It helps in smooth and effective running of a business. It focuses on the necessary steps to make
business ideas succeed and determine the course of action to achieve short-term and long-term objectives. It
finds potential markets for a new venture and reduces the uncertainty related to financial and competitive factors.
• Organizing: It involves organizing the resources, finances and work to increase the productivity of a business. It
also involves assigning work to people in different departments, creating the levels of authority and reporting so
that the work is divided, and the right people should be given the right jobs to reduce redundancy and increase
the efficiency.
• Directing: It is assigning the jobs to the people working in an organisation to increase the productivity of the
business and to achieve the predetermined goals. It is a continuous process and takes place at every level of the
organization.
• Staffing: It means giving jobs to the suitable person in an organization. This involves planning and recruiting
the employees for different departments in an organisation by evaluating their skills and knowledge. It also
includes training and development, appraisal and remuneration of workers to maintain a satisfactory workforce
in an organisation.
• Leadership: It is a formal and informal way of using power and authority to lead, guide and supervise people
who work for the business. It will motivate the others to complete a series of important tasks in attaining
specified goals of an organisation.
• Communication: A good communication skill will help an entrepreneur in the sharing of ideas, feelings,
emotions, knowledge and information with the people working in an organisation. Sharing successes and
failures with your people will help an entrepreneur build a strong bond with the people and give them a sense
of belonging to the company.
• Motivation: An entrepreneur motivates his employees by encouraging positive behaviour and culture within
the organization. It energizes the activities and canalizes the behaviour of the employees for the common goal
of an organisation. Employees with high motivation are very productive and perform their duties successfully.
Commercial Functions
An entrepreneur needs to perform the following commercial functions:
• Production and Operations: It is the process of converting the raw material or inputs through a set of
standardized systems into a finished product that can be sold to customers. It needs continuous monitoring and
improving quality standards to achieve maximum level of customer satisfaction. Some of the activities related to
it are related activities getting the raw materials, machinery functioning and maintenance, working of the labour
with full capacity, meeting order requirements etc.
• Finance and Accounting: It refers to the recording and analyzing of business activities on the basis of available
financial resources. It is very important to maintain the record of incoming and outgoing money so that its
proper utilization is done. Money is needed for the initial setup of an organisation, paying the salaries of the
employees, meeting the maintenance cost and further expansion and development of an organization.
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