ESB Certification Exam Study Guide Questions and Answers Graded A 2024

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