ESB Certification Exam Study Guide
2024-2025
Domain 1 Lesson 1 - Correct Ans-
The key objective of a small business owner is to generate ____ - Correct Ans-profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - Correct Ans-risks
Tangible items that require pick-up or delivery are ____ products - Correct Ans-physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction - Correct Ans-customer
____ are for-profit corporations with limited liability - Correct Ans-S corporations
____ are ideal for international businesses - Correct Ans-C corporations
The ____ oversees daily operational and administrative functions - Correct Ans-Chief
Operating Officer
A ____ votes on the management of a company - Correct Ans-stockholder
____ employees are paid a fixed amount each pay period - Correct Ans-Salary
Businesses can compensate employees for work they produce when being paid by
____ - Correct Ans-piece work
Businesses can offer ____ in addition to a lower salary - Correct Ans-equity
During the ____ stage of the business life cycle, a company is regularly taking on new
customers and starting to generate a consistent income - Correct Ans-survival
The owner may decide to sell their ownership in the company during the ____ stage -
Correct Ans-exit plan
The five elements of the design thinking process are ____ - Correct Ans-empathize,
define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective - Correct Ans-
Empathy
, The design team creates multiple inexpensive versions of a product, known as ____ -
Correct Ans-Minimum Viable Products
Name benefits of a franchise - Correct Ans-less risk involved, tested operational
processes, or recognized brands
No ownership, no US federal taxes - Correct Ans-Non-profit
Best for international business even with being double-taxed - Correct Ans-C
corporation
Easy to create but comes with unlimited liability - Correct Ans-Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - Correct Ans-S
corporation
Ideal for a single owner seeking low risk - Correct Ans-LLC (limited liability company)
Shared financial backing - Correct Ans-Partnership
Creates the company - Correct Ans-Founder
Oversees company finances - Correct Ans-CFO
Owns stock in the company - Correct Ans-Stockholder
Reports to the board of directors - Correct Ans-CEO
Oversees daily operational and administrative functions Stakeholder Has a vested
interest in the success of the company - Correct Ans-COO
Has a vested interest in the success of the company - Correct Ans-Stakeholder
Non-cash compensation - Correct Ans-Equity
Set rate of pay for hours worked - Correct Ans-Hourly
Usually found in sales roles - Correct Ans-Commission
Set amount of pay in a given period - Correct Ans-Salary
List the correct order of the business life cycle stages - Correct Ans-Existence, Survival,
Success, Take-off, Resource maturity, Pivot or persist, Exit plan
2024-2025
Domain 1 Lesson 1 - Correct Ans-
The key objective of a small business owner is to generate ____ - Correct Ans-profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to grow their
businesses rapidly - Correct Ans-risks
Tangible items that require pick-up or delivery are ____ products - Correct Ans-physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction - Correct Ans-customer
____ are for-profit corporations with limited liability - Correct Ans-S corporations
____ are ideal for international businesses - Correct Ans-C corporations
The ____ oversees daily operational and administrative functions - Correct Ans-Chief
Operating Officer
A ____ votes on the management of a company - Correct Ans-stockholder
____ employees are paid a fixed amount each pay period - Correct Ans-Salary
Businesses can compensate employees for work they produce when being paid by
____ - Correct Ans-piece work
Businesses can offer ____ in addition to a lower salary - Correct Ans-equity
During the ____ stage of the business life cycle, a company is regularly taking on new
customers and starting to generate a consistent income - Correct Ans-survival
The owner may decide to sell their ownership in the company during the ____ stage -
Correct Ans-exit plan
The five elements of the design thinking process are ____ - Correct Ans-empathize,
define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective - Correct Ans-
Empathy
, The design team creates multiple inexpensive versions of a product, known as ____ -
Correct Ans-Minimum Viable Products
Name benefits of a franchise - Correct Ans-less risk involved, tested operational
processes, or recognized brands
No ownership, no US federal taxes - Correct Ans-Non-profit
Best for international business even with being double-taxed - Correct Ans-C
corporation
Easy to create but comes with unlimited liability - Correct Ans-Sole proprietorship
Lower tax rate that prevents the company from being double-taxed - Correct Ans-S
corporation
Ideal for a single owner seeking low risk - Correct Ans-LLC (limited liability company)
Shared financial backing - Correct Ans-Partnership
Creates the company - Correct Ans-Founder
Oversees company finances - Correct Ans-CFO
Owns stock in the company - Correct Ans-Stockholder
Reports to the board of directors - Correct Ans-CEO
Oversees daily operational and administrative functions Stakeholder Has a vested
interest in the success of the company - Correct Ans-COO
Has a vested interest in the success of the company - Correct Ans-Stakeholder
Non-cash compensation - Correct Ans-Equity
Set rate of pay for hours worked - Correct Ans-Hourly
Usually found in sales roles - Correct Ans-Commission
Set amount of pay in a given period - Correct Ans-Salary
List the correct order of the business life cycle stages - Correct Ans-Existence, Survival,
Success, Take-off, Resource maturity, Pivot or persist, Exit plan
