ESB(Answers for ESB Practice Test Entrepreneurship & Small Business v.2 - U.S. Practice Exam 1 Training)Questions And Answers.

ESB(Answers for ESB Practice Test Entrepreneurship & Small Business v.2 - U.S. Practice Exam 1 Training)Questions And Answers. What is Entrepreneurship? Entrepreneurship is setting up a business with the aim to make a profit. You've been asked to classify several businesses as either B2B or B2C. For each business, select B2B or B2C. "B2B" is an acronym for "business to business," while "B2C" means "business to consumer." B2B businesses sell products and services directly to other businesses; whereas B2C businesses sell products and services directly to customers for personal use. B2B sales usually require a sales tax exemption certificate from the buyer. B2B: -Wholesale flooring distributor (because the transition implies the materials purchased will be resold through a retail business, such as an installer, or a store open to the general public) -Purchases requiring a tax exemption certificate (because the transaction states the buyer is reselling the goods and that is why the purchase is tax exempt) B2C: -Chain of local grocery stores (because purchases at the store are typically made by buyers for personal use. The number of grocery stores managed by the owner is irrelevant) -Motorcycle repair shop (because the service provided is typically for personal use) You need to create a legal structure for your small business. You would like some of the benefits enjoyed by large corporations, but do not want to be taxed twice. You have four partners who will be shareholders. None of you plan to sell your own shares to the public, but do want to be protected from business liabilities. Which legal structure should you set up for your business? S-Corporation Explain S-Corporation, C-Corporation, Sole Proprietorship, & Limited Liability Company (LLC) S-Corporation: -Offers many of the same benefits as a C Corporation, but better for smaller businesses -100 shareholders maximum allowed. All must be U.S. citizens or residents -Shareholders are not personally responsible for business liabilities -Taxed once--only the shareholders pay on profits received. A separate tax return is required for the business C-Corporation: -Best if the company plans to sell stock to the public someday; can issue shares to founders, employees, and investors -Unlimited owners (shareholders) allowed - Shareholders are not personally responsible for business liabilities -Taxed twice--business pays at the corporate level, and shareholders pay on income received. A separate tax return is required for the business. Sole Proprietorship: -Best if you need an easy set-up. You may still need a DBA or business license to operate legally, but no other paperwork is -One owner maximum -The owner is personally responsible for business liabilities. No personal liability protection -Taxed once--you pay on profits in your personal tax return. Separate tax returns are not needed Limited Liability Company (LLC): -Popular choice for businesses concerned about liability protection -Unlimited owners (members) allowed. No shareholders. LLCs cannot go public -Members are not personally responsible for business liabilities -An LLC can choose how to be taxed by filing form 8832 with the IRS. An LLC can elect to be taxed as a Sole Proprietorship, Partnership, S Corp, or C Corp. An LLC is not recognized globally; you may be taxed as a corporation in other countries For each statement about owners of equity in a business, select True or False. True: -A partner owns equity -Founders own equity False: -All stakeholders own equity -Contractors own equity By default, owners of equity in a business are founders, partners, and shareholders. Although it is possible that employees, contractors, and other stakeholders might purchase equity or be awarded equity in a business, it is not the default. Complete the sentence about company roles and responsibilities by selecting the correct option from each drop-down list. An example of ________ compensation is paying field laborers for the amount of fruit they pick. Piece Work A ________ employee receives a set amount of pay each month without overtime compensation for extra hours worked. Salary Employees most affected by minimum wage laws are compensated ________. Hourly An employee who is paid a percentage of a sale is paid by ________. Commission What is the correct order of the stages of the business life cycle. 1. Existence 2. Survival of the Fittest 3. Success 4. Take-off 5. Maturity Match each Element of the Design Thinking Process to its corresponding description. (in order) Research Your Users' Needs Empathize State Your Users' Needs and Problems Define Challenge Assumptions and Create Ideas Ideate Create Solutions Prototype Try Your Solutions Test Successful entrepreneurs have mindsets that typically possess which three characteristics? Adaptable, Responsible, Tenacious Which is one of the greatest benefits of being an entrepreneur? Schedule control One of the greatest benefits of being an entrepreneur is having control over your schedule What are the characteristics that help identify a business opportunity? Price, Quality, Selection, Location, Service The owner of a landscaping business has noticed that none of his competitors are including ponds or other water features in the gardens they create. The landscaper wants to determine the viability of this business opportunity. What should this entrepreneur do FIRST before offering to design and build features as part of his landscaping business? Ask the customers in the area if they are interested in adding a water feature to their gardens. The first thing the business owner should do is determine if there is a demand for water features. The best way to do that is to ask the customers. Which two documents summarize the business plan of a company? Lean Canvas & Pitch Deck What is a Balance Sheet? It is a summary of business assets and liabilities. It also shows owner's equity What is a Marketing Plan? It is an operational document that outlines a company's advertising strategy to generate leads and reach its target market. Business Plans and Pitch Decks Business Plan: -10-100 Pages -Highly Text-Based -Used to Get Investor Buy-In Pitch Deck: -10-20 slides -Highly Visual -Used to Get Investors Attention What three elements are required to have a Trade Secret?