A business enterprise will have to offer products or services to buyers, whether they are consumers or producers. The firm will either buy or manufacture the products or services it will sell. In any case, there will be a need to hire the services of employees, laborers, and managers. Equipment, furniture and machinery must be acquired. All of the above will require funds which the entrepreneur must produce, in addition to whatever fund reserves are required.
The new task of the entrepreneur is to set a production unit complete with manpower and equipment, the quality and quantity of which have been predetermined by him.
The entrepreneur will also determine and make decisions on the rate of output the firm must produce. This will have to be tied up with demand.
Finally, whatever risk is involved in the entrepreneurial activity, he must suffer the consequence of losses if he fails but he must reap profits as a reward if he succeeds.
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