ESB Certification Exam Study Guide (Answered) Complete Verified Solution

ESB Certification Exam Study Guide (Answered) Complete Verified Solution 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 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 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 During which stage of the design thinking process will the design team create multiple inexpensive product versions? Prototype During which stage of the design thinking process is a problem statement formed? Define Which stage of the design thinking process involves learning about customers' challenges? Empathize Domain 1 Lesson 2 ____ is the amount of loss one is willing to take when making an investment decision Risk tolerance Having a ____ mindset means believing that one can accomplish anything through hard work growth An example of an ____ risk is a natural disaster environmental A business opportunity is an ____ that lets a buyer start a business investment A ____ needs to be obtained to use a brand name on products license The five factors that determine the viability of a business opportunity are ____, relationships, cash flow management, management skillsets, and passion market size A business plan helps a business achieve short-term and long-term ____ goals A lean canvas should only be ____ long one page The ____ summary creates the first impression of a business plan executive The ____ plan should specifically be directed to investors and lenders financial A pitch deck is most commonly presented in the form of a ____ presentation slide A ____ provides a brief overview of a business where one talks about the company's mission and the value provided to customers vision and value proposition A patent protects an ____ from being copied invention Trade secrets protect a company's formulas from being shared with ____ competitors To license a product, one must obtain ____ from the author or creator authorization Confidentiality or ____ agreements are signed by employees, agreeing not to share trade secrets non-disclosure Name a characteristic of a successful entrepreneur and explain why that skill would be helpful when starting a business a large variety of characteristics because entrepreneurs recognize opportunities and tolerate risks so they have growth mindsets and use critical thinking to overcome obstacles, they also collaborate with others to solve problems; these characteristics help entrepreneurs be successful Name one example of a political risk that an entrepreneur might face increased tax rates or large tariffs Name one example of an environmental risk that an entrepreneur might face natural disasters, poor food supplies, or inflation Name one example of a financial risk that an entrepreneur might face bankruptcy or no promise of income Which business opportunity involves recruiting marketers to join a team? Network marketing Which business opportunity involves higher start-up costs? Franchise Which business opportunity obtains licenses to use a brand name? Licensing Which viability factor involves the potential funding of a business opportunity? Managing cash flow Which viability factor involves building relationships with experienced professionals? Relationships Which viability factor can help an entrepreneur make up for a lack of skills? Passion Which viability factor analyzes the skills of employees? Management skillset Which viability factor researches the demand for products or services? Market size What is the purpose of a pitch deck? attracting investors, getting them excited, and getting another meeting with them What is the purpose of a lean canvas? allowing feedback from others and brainstorming ideas Which section of a business plan determines if there is a large enough customer pool? Marketing plan Which section of a business plan briefly explains everything in the business plan? Executive summary Which section of a business plan includes roles that have not yet been filled? Organizational structure Which section of a business plan includes things like a budget and profit and loss projection?