The Role of the Entrepreneur
Mitchell G. Thompson
The objective of this paper is to provide detailed information of (1) what must an entrepreneur do to earn a profit? (2) How do the actions of firms earning profits influence the value of resources? (3) What happens to the value of resources when losses are present? (4) If a firm making losses goes out of business, is this bad? Why or why not?
Role of the Entrepreneur
Let’s first look at it this way an entrepreneur is a person that creates, organizes and manages a business while trying to make a profit. The first thing an entrepreneur needs to do is to think of an idea. They have to be inquirers so they can gather as much information as possible. Have a necessity to constantly reflect on their decisions. Be risk-takers because there is always a chance that their business will not succeed. Having an open mind when presenting their ideas and receiving feedback. Most importantly they must be good communicators when sharing their ideas with investors and when advertising and promoting their company. Have an acute knowledge of business law. For example, they may want to apply for a patent. They must also be principled and caring towards their employees and customers. By being a hardworking entrepreneur, they will have the opportunity to be very successful.
Now, profit is a key concern to the entrepreneur. Profit is the difference between the price at which you sell a good and the price at which you bought it. Running a business/firm, net profit is what is left out of turn-over after paying suppliers, workers, financing institution, and the state. In insurance companies, it's the difference between the sums of the premiums collected and the total claims resulting from insured negative shocks. In this case, let’s look the first mentioned if a firm is earning a profit...