ESB EXAM Study Guide best complete solutions
2025/2026
/.What are three characteristics of entrepreneurs? - Answer-Creativity, Determination,
Enthusiasm
/.After a self-assessment, a potential entrepreneur has learned that she has a very low
risk tolerance. Based upon this finding, which approach might be less stressful for the
entrepreneur to have her own business? - Answer-Buy an existing business that is
already successful.
/.An entrepreneur moves into a small town and notices several stores selling guns and
ammunition. The entrepreneur loves to compete in competitive shooting events. Based
on the scenario provided, what should be emphasized in marketing to attract
customers? - Answer-Location
/.An entrepreneur has been working for a flooring business in a neighboring town. He
feels he is ready to open his own flooring business in his local community. Which should
be emphasized in marketing to attract customers to his new business? - Answer-Lower
Prices
/.Which is one of the greatest benefits of entrepreneurship? - Answer-Being your own
boss
/.Which are three risks of entrepreneurship? - Answer-Long hours, potential business
failure, financial insecurity
/.Gabe has worked as a journeyman electrician for an employer for the past 16 years.
He is paid a good salary. His only dissatisfaction is the hours are long and often when
he requests time off he is denied because of customer workload.
Which benefit of entrepreneurship will Gabe most enjoy? - Answer-Autonomy
/.What is a primary benefit of starting a new business without purchasing a franchise or
buying an existing business? - Answer-Developing your own rules
/.A mechanic just graduated from motorcycle repair school and wants to start a
business because there is a lack of motorcycle repair shops in the local town. Given the
facts provided, which opportunity would be the best choice for the motorcycle mechanic
to open a business? - Answer-Start a new business and invest $50,000 in modern
diagnostic tools.
,/.An entrepreneur who has a hobby in leathercraft wants to turn it into a business. She
wants to sell purses, belts, and other leathercrafts from her home. Which opportunity for
starting a leathercraft business would have the highest probability of success? -
Answer-Build an online storefront
/.Based upon the education and skills gained from the years of vocational training as an
auto mechanic, as well as having grown up in a family of entrepreneurs, a young adult
decides to open an auto mechanic shop. Which customer group will this new auto
mechanic business support? - Answer-Businesses
/.The owner of a pizza delivery business is seeking new customers. The owner has
identified a group of potential customers that have moved into some new housing within
reaches of his drivers. Which method of segmentation is the owner using? - Answer-
Geographic
/.A child daycare center needs to identify a value of proposition that will help parents
feel secure about using their services. Which two initiatives meets this objective? -
Answer-Providing live web cams parents can access from the Internet by using a
secure logon. Offering a list of references from other parents
/.The owner of a pet daycare is presenting a plan to investors to expand the facility and
promises the center will meet the needs of customers with a variety of schedules. What
is a legitimate value proposition for potential customers? - Answer-Providing extended
hours to pickup and drop off pets before and after work
/.Which two groups benefit most from a well-written business plan? - Answer-Business
owner
Investors
/.Which of the following should be addressed in the description section of a business
plan? - Answer-Target Markets
/.Easy to setup, but has unlimited liability. - Answer-Sole Proprietorship
/.Terminates upon death of a partner - Answer-General or Limited Partnership
/.Double-taxed, but best for international businesses - Answer-C Corporation
/.Similar to a C Corporation, but taxed at a lower rate - Answer-S Corporation
/.Owned by no one; pays no U.S federal tax - Answer-Nonprofit Corporation
/.Best for a single member seeking low risk - Answer-Limited Liability Company
/.The partners of an awning repair shop are assessing the amount of money needed to
start a business at a new location. The partners have calculating that the business will
,generate more than enough revenue to cover monthly expenses after its second month
in operation. What is the amount of start-up capital the partners will need to open the
new awning repair business? - Answer-$84,920
/.The owner of a mobile food truck plans to sell tacos, hamburgers, and other foods to
employees in a large office complex. Before opening his business, the owner will most
likely need to obtain which of the following documents from each employee to verify
they have completed a course in food handling safety? - Answer-Certificate
/.An individual starts a babysitting business with a loan of $1000. The loan is for 2 years
at a 5% COMPOUND interest rate. How much will the individual owe by the end of the
loan assuming nothing is paid until the end of the 2 years term. - Answer-$1,102.50
/.A carpenter wants to start his own business building custom cabinets. Unfortunately,
he has no business training and needs assistance writing a business plan, finding
funding, and obtaining general advice. Which agency should the carpenter utilize? -
Answer-SBA
/.A software development consultant works with several clients. Some of the clients are
competitors. What is a consequence if the consultant violates confidentiality by
discussing a client's project with another client? - Answer-Loss of clients and possible
lawsuit
/.Exchanging ownership for cash, either by acquisition or merger - Answer-Harvesting
/.Transferring ownership to people who already operate the business - Answer-
Management Buyout
/.A business owner sells ownership to a retirement fund for the employees - Answer-
Employee Stock Ownership Plan (ESOP)
/.Dividing ownership of a privately held company into shares sold to the public - Answer-
Initial Public Offering (IPO)
/.The owner of a popular seafood restaurant needs to hire a new chef - Answer-1.
Identify the skills required of the new chef
2. Write the job description, including minimum and desired requirements
3. Post an ad in places most likely to be viewed by qualified candidates
4. Accept and review applications to assess the most qualified candidate
/.A successful software trainer has decided to open a corporate training business. The
software trainer is putting together an organizational chair and assessing what job roles
will be needed. What are some of the expected roles of those employees on the highest
level of the organizational chart? - Answer-Developing succession plans and building a
board of advisors
, /.An interior designer has learned the she must pay-self employment tax on her
individual earnings. Which type of legal structure must pay self-employment tax? -
Answer-Sole proprietorship
/.An entrepreneur was building a website for a new dog grooming business. Through
internet searches, the entrepreneur found many pictures to use on the new business's
website. Which type of intellectual property protection is at issue in this example? -
Answer-Copyright
/.An entrepreneur notices new demand for products featuring characters from a recent
movie. The entrepreneur finds a manufacturer of kitchen products featuring these
character. Based on the scenario provided, what should be a primary concern of this
entrepreneur? - Answer-Reliability of supply
/.A family owns a tractor sales and supply store. Over the past decade sales of large
tractors and implements have decreased as many of the old farms in the community
have sold and been subdivided into smaller residential hobby farms. Given the facts
provided, which action would be most likely to increase the sustainability of the
business? - Answer-Add a line of small lawn and garden tractors
/.The owner of a new landscaping company has set a number of milestones for the first
year of his business. Achieving which of the following goals will show that the business
has broken even or better? - Answer-Profitable operations
/.A property care business provides landscaping maintenance, debris cleanup, and
snow removal. The owner is reviewing several requests for its services. Which potential
new customer will generate the highest gross revenue over the next year? - Answer-
Apartment complex paying $175 weekly
/.A local bakery wants to develop close relationships with its customers to encourage
return business. What is the best option for the bakery to accomplish this goal? -
Answer-Provide a free baked good each quarter to customers who signup to receive a
monthly newsletter
/.The owner of a tire shop in a large city wants to reach the largest number of people
with promotional efforts. Which method should be used? - Answer-TV advertising
/.The owner of a computer training center wants to know the book value of all the
equipment in the center at the end of the year. Which financial statement provides this
information? - Answer-Balance sheet
/.The owner of Reliable Appliance Repairs is analyzing financial parts of the income
statement including Net Sales, Total Cost of Goods Sold, Gross Profit, Total Expenses,
Pre-Tax Profit and Net Profit. Match each figure to correct location in the Income
Statement worksheet. - -A.$45,144
B.$18,500
2025/2026
/.What are three characteristics of entrepreneurs? - Answer-Creativity, Determination,
Enthusiasm
/.After a self-assessment, a potential entrepreneur has learned that she has a very low
risk tolerance. Based upon this finding, which approach might be less stressful for the
entrepreneur to have her own business? - Answer-Buy an existing business that is
already successful.
/.An entrepreneur moves into a small town and notices several stores selling guns and
ammunition. The entrepreneur loves to compete in competitive shooting events. Based
on the scenario provided, what should be emphasized in marketing to attract
customers? - Answer-Location
/.An entrepreneur has been working for a flooring business in a neighboring town. He
feels he is ready to open his own flooring business in his local community. Which should
be emphasized in marketing to attract customers to his new business? - Answer-Lower
Prices
/.Which is one of the greatest benefits of entrepreneurship? - Answer-Being your own
boss
/.Which are three risks of entrepreneurship? - Answer-Long hours, potential business
failure, financial insecurity
/.Gabe has worked as a journeyman electrician for an employer for the past 16 years.
He is paid a good salary. His only dissatisfaction is the hours are long and often when
he requests time off he is denied because of customer workload.
Which benefit of entrepreneurship will Gabe most enjoy? - Answer-Autonomy
/.What is a primary benefit of starting a new business without purchasing a franchise or
buying an existing business? - Answer-Developing your own rules
/.A mechanic just graduated from motorcycle repair school and wants to start a
business because there is a lack of motorcycle repair shops in the local town. Given the
facts provided, which opportunity would be the best choice for the motorcycle mechanic
to open a business? - Answer-Start a new business and invest $50,000 in modern
diagnostic tools.
,/.An entrepreneur who has a hobby in leathercraft wants to turn it into a business. She
wants to sell purses, belts, and other leathercrafts from her home. Which opportunity for
starting a leathercraft business would have the highest probability of success? -
Answer-Build an online storefront
/.Based upon the education and skills gained from the years of vocational training as an
auto mechanic, as well as having grown up in a family of entrepreneurs, a young adult
decides to open an auto mechanic shop. Which customer group will this new auto
mechanic business support? - Answer-Businesses
/.The owner of a pizza delivery business is seeking new customers. The owner has
identified a group of potential customers that have moved into some new housing within
reaches of his drivers. Which method of segmentation is the owner using? - Answer-
Geographic
/.A child daycare center needs to identify a value of proposition that will help parents
feel secure about using their services. Which two initiatives meets this objective? -
Answer-Providing live web cams parents can access from the Internet by using a
secure logon. Offering a list of references from other parents
/.The owner of a pet daycare is presenting a plan to investors to expand the facility and
promises the center will meet the needs of customers with a variety of schedules. What
is a legitimate value proposition for potential customers? - Answer-Providing extended
hours to pickup and drop off pets before and after work
/.Which two groups benefit most from a well-written business plan? - Answer-Business
owner
Investors
/.Which of the following should be addressed in the description section of a business
plan? - Answer-Target Markets
/.Easy to setup, but has unlimited liability. - Answer-Sole Proprietorship
/.Terminates upon death of a partner - Answer-General or Limited Partnership
/.Double-taxed, but best for international businesses - Answer-C Corporation
/.Similar to a C Corporation, but taxed at a lower rate - Answer-S Corporation
/.Owned by no one; pays no U.S federal tax - Answer-Nonprofit Corporation
/.Best for a single member seeking low risk - Answer-Limited Liability Company
/.The partners of an awning repair shop are assessing the amount of money needed to
start a business at a new location. The partners have calculating that the business will
,generate more than enough revenue to cover monthly expenses after its second month
in operation. What is the amount of start-up capital the partners will need to open the
new awning repair business? - Answer-$84,920
/.The owner of a mobile food truck plans to sell tacos, hamburgers, and other foods to
employees in a large office complex. Before opening his business, the owner will most
likely need to obtain which of the following documents from each employee to verify
they have completed a course in food handling safety? - Answer-Certificate
/.An individual starts a babysitting business with a loan of $1000. The loan is for 2 years
at a 5% COMPOUND interest rate. How much will the individual owe by the end of the
loan assuming nothing is paid until the end of the 2 years term. - Answer-$1,102.50
/.A carpenter wants to start his own business building custom cabinets. Unfortunately,
he has no business training and needs assistance writing a business plan, finding
funding, and obtaining general advice. Which agency should the carpenter utilize? -
Answer-SBA
/.A software development consultant works with several clients. Some of the clients are
competitors. What is a consequence if the consultant violates confidentiality by
discussing a client's project with another client? - Answer-Loss of clients and possible
lawsuit
/.Exchanging ownership for cash, either by acquisition or merger - Answer-Harvesting
/.Transferring ownership to people who already operate the business - Answer-
Management Buyout
/.A business owner sells ownership to a retirement fund for the employees - Answer-
Employee Stock Ownership Plan (ESOP)
/.Dividing ownership of a privately held company into shares sold to the public - Answer-
Initial Public Offering (IPO)
/.The owner of a popular seafood restaurant needs to hire a new chef - Answer-1.
Identify the skills required of the new chef
2. Write the job description, including minimum and desired requirements
3. Post an ad in places most likely to be viewed by qualified candidates
4. Accept and review applications to assess the most qualified candidate
/.A successful software trainer has decided to open a corporate training business. The
software trainer is putting together an organizational chair and assessing what job roles
will be needed. What are some of the expected roles of those employees on the highest
level of the organizational chart? - Answer-Developing succession plans and building a
board of advisors
, /.An interior designer has learned the she must pay-self employment tax on her
individual earnings. Which type of legal structure must pay self-employment tax? -
Answer-Sole proprietorship
/.An entrepreneur was building a website for a new dog grooming business. Through
internet searches, the entrepreneur found many pictures to use on the new business's
website. Which type of intellectual property protection is at issue in this example? -
Answer-Copyright
/.An entrepreneur notices new demand for products featuring characters from a recent
movie. The entrepreneur finds a manufacturer of kitchen products featuring these
character. Based on the scenario provided, what should be a primary concern of this
entrepreneur? - Answer-Reliability of supply
/.A family owns a tractor sales and supply store. Over the past decade sales of large
tractors and implements have decreased as many of the old farms in the community
have sold and been subdivided into smaller residential hobby farms. Given the facts
provided, which action would be most likely to increase the sustainability of the
business? - Answer-Add a line of small lawn and garden tractors
/.The owner of a new landscaping company has set a number of milestones for the first
year of his business. Achieving which of the following goals will show that the business
has broken even or better? - Answer-Profitable operations
/.A property care business provides landscaping maintenance, debris cleanup, and
snow removal. The owner is reviewing several requests for its services. Which potential
new customer will generate the highest gross revenue over the next year? - Answer-
Apartment complex paying $175 weekly
/.A local bakery wants to develop close relationships with its customers to encourage
return business. What is the best option for the bakery to accomplish this goal? -
Answer-Provide a free baked good each quarter to customers who signup to receive a
monthly newsletter
/.The owner of a tire shop in a large city wants to reach the largest number of people
with promotional efforts. Which method should be used? - Answer-TV advertising
/.The owner of a computer training center wants to know the book value of all the
equipment in the center at the end of the year. Which financial statement provides this
information? - Answer-Balance sheet
/.The owner of Reliable Appliance Repairs is analyzing financial parts of the income
statement including Net Sales, Total Cost of Goods Sold, Gross Profit, Total Expenses,
Pre-Tax Profit and Net Profit. Match each figure to correct location in the Income
Statement worksheet. - -A.$45,144
B.$18,500
