Role of the Entrepreneur - Essay Example

Role of the Entrepreneur What Must An Entrepreneur Do To Earn A Profit? Successful business ventures will require the entrepreneur to apply some strategies and skills so as to ensure that the total costs of the business are lower that than the revenues the business generates, and this will guarantee profits for the organization. An entrepreneur is first supposed to see an opportunity for making money and then make a plan on how to venture into that line of business (Kuratko & Hodgetts, 2008). The next step is to take a risk by investing money into the business and starting up the business and ensuring the business is highly competitive.

Managing the business is the next step the business must take and the entrepreneur must ascertain that the incomes the business makes are higher than the expenses incurred while conducting the business. Understanding the drivers in the industry is important in as it makes the entrepreneur innovative which is a chief success attribute of an entrepreneur (Kingsland, 2007). Making the right decisions is paramount for the entrepreneur and he must ensure that resources are directed towards the right channels to ascertain there is no squander of resources, which would lead to losses.(2) How Do The Actions Of Firm Earning Profits Influence The Value Of Resources?

The actions of a firm earning profits add the value of resources as the firm is able to procure more resources into the business and operate at economies of scale. When a firm earns profits, the entrepreneur will be able to expand operations because they will have more money to spend to purchase more resources from the profits the organization makes. The organization will also be able to venture more into technology and move with the trends in the market so as to compete favorably with other business because they have enough revenues and this helps the organization to venture into new markets or improve their business operations.(3) What Happens To The Value Of Resources When Losses Are Present?

When losses are present, the value of resources diminishes, and this is because the business does not have adequate revenue to continue with its operations. Losses will eat into the capital of the business and some resources will be lost because the organization cannot put up with the high operational costs. When losses are present, operational costs will be high and this means that resources of the business will not be put into full potential hence the value of the resources will diminish. Some businesses are even forced to let go of some of the resources so as to maintain operational costs and this means that the value of the resources is diminished.(4) If A Firm Making Losses Goes Out Of Business, Is This Bad?

Why or Why Not?It is not bad if a company making losses goes out of business, and this is because the central endeavor of a business is to get profits and if this end is not met, going out of business is the most viable option. Continuing with the business will imply using up the capital of the business or personal resources and this is not right as money will be lost. Moving out of the business will give the entrepreneur the chance to restructure and venture into a business that will guarantee profits.

ReferencesBhide, A. (1996).The Questions Every Entrepreneur Must Answer. Harvard Business Review.Kingsland, B. (2007). Finding Opportunities for Innovation and Growth. Spectrum Innovation Group.Kuratko, D. F. & Hodgetts, R. M. (2008). Entrepreneurship: Theory, Process, Practice. Mason, OH: Cengage Learning