Functions of the entrepreneur are:
(i) Decision Making : The primary task of an entrepreneur is to decide the policy of production. An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell and so forth. Moreover, he is to decide the scale of production and the proportion in which he combines the different factors he employs. In brief, he is to make vital business decisions relating to the purchase of productive factors and to the sale of the finished goods or services.
(ii) Risk-bearing : Risk-bearing is perhaps the most important function of an entrepreneur. Modern production is very risky. An entrepreneur is required to produce goods or services in anticipation of their future demand.
Broadly, there are two kinds of risk which he has to face. Firstly, there are some risks, such as risks of fire, loss of goods in transit, theft, etc. which can be insured against. These are known as measurable and insurable risks. Secondly, some risk, however, cannot be insured against because their probability cannot be calculated accurately. Such types of risk give rise to uncertainty (e.g., competitive risk, technical risk, taxation policy etc.). The entrepreneur undertakes both these risks in production.