ESB Certification Exam Study Guide
Exam Questions and Answers 100%
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Domain 1 Lesson 1 - ✔✔
The key objective of a small business owner is to generate ____ - ✔✔profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow
their businesses rapidly - ✔✔risks
Tangible items that require pick-up or delivery are ____ products - ✔✔physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction - ✔✔customer
____ are for-profit corporations with limited liability - ✔✔S corporations
____ are ideal for international businesses - ✔✔C corporations
The ____ oversees daily operational and administrative functions - ✔✔Chief Operating
Officer
A ____ votes on the management of a company - ✔✔stockholder
____ employees are paid a fixed amount each pay period - ✔✔Salary
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 1
,Businesses can compensate employees for work they produce when being paid by ____
- ✔✔piece work
Businesses can offer ____ in addition to a lower salary - ✔✔equity
During the ____ stage of the business life cycle, a company is regularly taking on new
customers and starting to generate a consistent income - ✔✔survival
The owner may decide to sell their ownership in the company during the ____ stage -
✔✔exit plan
The five elements of the design thinking process are ____ - ✔✔empathize, define, ideate,
prototype , and test
____ allows one to see and experience a customer's perspective - ✔✔Empathy
The design team creates multiple inexpensive versions of a product, known as ____ -
✔✔Minimum Viable Products
Name benefits of a franchise - ✔✔less risk involved, tested operational processes, or
recognized brands
No ownership, no US federal taxes - ✔✔Non-profit
Best for international business even with being double-taxed - ✔✔C corporation
Easy to create but comes with unlimited liability - ✔✔Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - ✔✔S corporation
Ideal for a single owner seeking low risk - ✔✔LLC (limited liability company)
Shared financial backing - ✔✔Partnership
Creates the company - ✔✔Founder
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 2
, Oversees company finances - ✔✔CFO
Owns stock in the company - ✔✔Stockholder
Reports to the board of directors - ✔✔CEO
Oversees daily operational and administrative functions Stakeholder Has a vested
interest in the success of the company - ✔✔COO
Has a vested interest in the success of the company - ✔✔Stakeholder
Non-cash compensation - ✔✔Equity
Set rate of pay for hours worked - ✔✔Hourly
Usually found in sales roles - ✔✔Commission
Set amount of pay in a given period - ✔✔Salary
List the correct order of the business life cycle stages - ✔✔Existence, Survival, Success,
Take-off, Resource maturity, Pivot or persist, Exit plan
Michael owns a small but profitable tech company. He has been approached by a larger
company that wants to purchase his business. In which business life cycle stage is
Michael? - ✔✔Exit Plan
Bill just started a new graphic design business. He is advertising online and trying to
gain customers. He just finished working with his first client. In which business life
cycle stage is Bill? - ✔✔Existence
Stephanie started a new flower shop last year. She has a good customer base and money
coming in. In which business life cycle stage is Stephanie? - ✔✔Survival
List the correct order of the design thinking process - ✔✔Empathize, Define, Ideate,
Prototype, Test
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 3
Exam Questions and Answers 100%
Pass
Domain 1 Lesson 1 - ✔✔
The key objective of a small business owner is to generate ____ - ✔✔profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow
their businesses rapidly - ✔✔risks
Tangible items that require pick-up or delivery are ____ products - ✔✔physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction - ✔✔customer
____ are for-profit corporations with limited liability - ✔✔S corporations
____ are ideal for international businesses - ✔✔C corporations
The ____ oversees daily operational and administrative functions - ✔✔Chief Operating
Officer
A ____ votes on the management of a company - ✔✔stockholder
____ employees are paid a fixed amount each pay period - ✔✔Salary
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 1
,Businesses can compensate employees for work they produce when being paid by ____
- ✔✔piece work
Businesses can offer ____ in addition to a lower salary - ✔✔equity
During the ____ stage of the business life cycle, a company is regularly taking on new
customers and starting to generate a consistent income - ✔✔survival
The owner may decide to sell their ownership in the company during the ____ stage -
✔✔exit plan
The five elements of the design thinking process are ____ - ✔✔empathize, define, ideate,
prototype , and test
____ allows one to see and experience a customer's perspective - ✔✔Empathy
The design team creates multiple inexpensive versions of a product, known as ____ -
✔✔Minimum Viable Products
Name benefits of a franchise - ✔✔less risk involved, tested operational processes, or
recognized brands
No ownership, no US federal taxes - ✔✔Non-profit
Best for international business even with being double-taxed - ✔✔C corporation
Easy to create but comes with unlimited liability - ✔✔Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - ✔✔S corporation
Ideal for a single owner seeking low risk - ✔✔LLC (limited liability company)
Shared financial backing - ✔✔Partnership
Creates the company - ✔✔Founder
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 2
, Oversees company finances - ✔✔CFO
Owns stock in the company - ✔✔Stockholder
Reports to the board of directors - ✔✔CEO
Oversees daily operational and administrative functions Stakeholder Has a vested
interest in the success of the company - ✔✔COO
Has a vested interest in the success of the company - ✔✔Stakeholder
Non-cash compensation - ✔✔Equity
Set rate of pay for hours worked - ✔✔Hourly
Usually found in sales roles - ✔✔Commission
Set amount of pay in a given period - ✔✔Salary
List the correct order of the business life cycle stages - ✔✔Existence, Survival, Success,
Take-off, Resource maturity, Pivot or persist, Exit plan
Michael owns a small but profitable tech company. He has been approached by a larger
company that wants to purchase his business. In which business life cycle stage is
Michael? - ✔✔Exit Plan
Bill just started a new graphic design business. He is advertising online and trying to
gain customers. He just finished working with his first client. In which business life
cycle stage is Bill? - ✔✔Existence
Stephanie started a new flower shop last year. She has a good customer base and money
coming in. In which business life cycle stage is Stephanie? - ✔✔Survival
List the correct order of the design thinking process - ✔✔Empathize, Define, Ideate,
Prototype, Test
COPYRIGHT © 2025 BY KATELYN WHITMAN, ALL RIGHTS RESERVED 3
