ESB Certification Exam Study Guide
Questions and Answers
When must Small Business Administration (SBA) real estate loans and equipment and inventory
loans be repaid? - ANSWERS -Real estate loans must be paid back within 25 years, while
equipment and inventory loans must be repaid in 10 years
List two eligibility requirements for Small Business Administration (SBA) grants. - ANSWERS -The
business must operate for a profit, operate within the United States or its territories, the owners
must have responsible owner equity to investment, or use alternative financial resources before
seeking financial assistance, including using personal assets
____ are wealthy individuals willing to finance a business for an equity stake in the business in
return. - ANSWERS -Angel investors
What is one reason a business owner should read a crowdfunding platform's fine print before
using it as a funding source? - ANSWERS -Many crowdfunding platforms charge a processing fee
for each purchase or that some platforms require business owners to meet their financial goals
before they can access any funds that have been raised.
Domain 1 Lesson 1 - ANSWERS -
The key objective of a small business owner is to generate ____ - ANSWERS -profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - ANSWERS -risks
Tangible items that require pick-up or delivery are ____ products - ANSWERS -physical
,When a ____ purchases an item from a business, it is a business-to-consumer transaction -
ANSWERS -customer
____ are for-profit corporations with limited liability - ANSWERS -S corporations
____ are ideal for international businesses - ANSWERS -C corporations
The ____ oversees daily operational and administrative functions - ANSWERS -Chief Operating
Officer
A ____ votes on the management of a company - ANSWERS -stockholder
____ employees are paid a fixed amount each pay period - ANSWERS -Salary
Businesses can compensate employees for work they produce when being paid by ____ -
ANSWERS -piece work
Businesses can offer ____ in addition to a lower salary - ANSWERS -equity
During the ____ stage of the business life cycle, a company is regularly taking on new customers
and starting to generate a consistent income - ANSWERS -survival
The owner may decide to sell their ownership in the company during the ____ stage - ANSWERS
-exit plan
The five elements of the design thinking process are ____ - ANSWERS -empathize, define,
ideate, prototype , and test
, ____ allows one to see and experience a customer's perspective - ANSWERS -Empathy
The design team creates multiple inexpensive versions of a product, known as ____ - ANSWERS
-Minimum Viable Products
Name benefits of a franchise - ANSWERS -less risk involved, tested operational processes, or
recognized brands
No ownership, no US federal taxes - ANSWERS -Non-profit
Best for international business even with being double-taxed - ANSWERS -C corporation
Easy to create but comes with unlimited liability - ANSWERS -Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - ANSWERS -S corporation
Ideal for a single owner seeking low risk - ANSWERS -LLC (limited liability company)
Shared financial backing - ANSWERS -Partnership
Creates the company - ANSWERS -Founder
Oversees company finances - ANSWERS -CFO
Owns stock in the company - ANSWERS -Stockholder
Questions and Answers
When must Small Business Administration (SBA) real estate loans and equipment and inventory
loans be repaid? - ANSWERS -Real estate loans must be paid back within 25 years, while
equipment and inventory loans must be repaid in 10 years
List two eligibility requirements for Small Business Administration (SBA) grants. - ANSWERS -The
business must operate for a profit, operate within the United States or its territories, the owners
must have responsible owner equity to investment, or use alternative financial resources before
seeking financial assistance, including using personal assets
____ are wealthy individuals willing to finance a business for an equity stake in the business in
return. - ANSWERS -Angel investors
What is one reason a business owner should read a crowdfunding platform's fine print before
using it as a funding source? - ANSWERS -Many crowdfunding platforms charge a processing fee
for each purchase or that some platforms require business owners to meet their financial goals
before they can access any funds that have been raised.
Domain 1 Lesson 1 - ANSWERS -
The key objective of a small business owner is to generate ____ - ANSWERS -profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - ANSWERS -risks
Tangible items that require pick-up or delivery are ____ products - ANSWERS -physical
,When a ____ purchases an item from a business, it is a business-to-consumer transaction -
ANSWERS -customer
____ are for-profit corporations with limited liability - ANSWERS -S corporations
____ are ideal for international businesses - ANSWERS -C corporations
The ____ oversees daily operational and administrative functions - ANSWERS -Chief Operating
Officer
A ____ votes on the management of a company - ANSWERS -stockholder
____ employees are paid a fixed amount each pay period - ANSWERS -Salary
Businesses can compensate employees for work they produce when being paid by ____ -
ANSWERS -piece work
Businesses can offer ____ in addition to a lower salary - ANSWERS -equity
During the ____ stage of the business life cycle, a company is regularly taking on new customers
and starting to generate a consistent income - ANSWERS -survival
The owner may decide to sell their ownership in the company during the ____ stage - ANSWERS
-exit plan
The five elements of the design thinking process are ____ - ANSWERS -empathize, define,
ideate, prototype , and test
, ____ allows one to see and experience a customer's perspective - ANSWERS -Empathy
The design team creates multiple inexpensive versions of a product, known as ____ - ANSWERS
-Minimum Viable Products
Name benefits of a franchise - ANSWERS -less risk involved, tested operational processes, or
recognized brands
No ownership, no US federal taxes - ANSWERS -Non-profit
Best for international business even with being double-taxed - ANSWERS -C corporation
Easy to create but comes with unlimited liability - ANSWERS -Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - ANSWERS -S corporation
Ideal for a single owner seeking low risk - ANSWERS -LLC (limited liability company)
Shared financial backing - ANSWERS -Partnership
Creates the company - ANSWERS -Founder
Oversees company finances - ANSWERS -CFO
Owns stock in the company - ANSWERS -Stockholder
