ESB EXAM Study Guide with Complete
Solutions
Flexibility - Correct Answer Ability to adapt, willingness to change
Courage - Correct Answer Takes risks in spite of possible losses
Empathy - Correct Answer Sensitive to thoughts and feelings of others
What are three characteristics of entrepreneurs? - Correct 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? - Correct 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? - Correct 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? - Correct Answer Lower Prices
Which is one of the greatest benefits of entrepreneurship? - Correct Answer Being your own boss
Which are three risks of entrepreneurship? - Correct 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? - Correct Answer Autonomy
,What is a primary benefit of starting a new business without purchasing a franchise or buying an existing
business? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct Answer Business owner
Investors
, Which of the following should be addressed in the description section of a business plan? - Correct
Answer Target Markets
Easy to setup, but has unlimited liability. - Correct Answer Sole Proprietorship
Terminates upon death of a partner - Correct Answer General or Limited Partnership
Double-taxed, but best for international businesses - Correct Answer C Corporation
Similar to a C Corporation, but taxed at a lower rate - Correct Answer S Corporation
Owned by no one; pays no U.S federal tax - Correct Answer Nonprofit Corporation
Best for a single member seeking low risk - Correct 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? - Correct 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? - Correct 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. - Correct 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? - Correct Answer SBA
Solutions
Flexibility - Correct Answer Ability to adapt, willingness to change
Courage - Correct Answer Takes risks in spite of possible losses
Empathy - Correct Answer Sensitive to thoughts and feelings of others
What are three characteristics of entrepreneurs? - Correct 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? - Correct 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? - Correct 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? - Correct Answer Lower Prices
Which is one of the greatest benefits of entrepreneurship? - Correct Answer Being your own boss
Which are three risks of entrepreneurship? - Correct 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? - Correct Answer Autonomy
,What is a primary benefit of starting a new business without purchasing a franchise or buying an existing
business? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct 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? - Correct Answer Business owner
Investors
, Which of the following should be addressed in the description section of a business plan? - Correct
Answer Target Markets
Easy to setup, but has unlimited liability. - Correct Answer Sole Proprietorship
Terminates upon death of a partner - Correct Answer General or Limited Partnership
Double-taxed, but best for international businesses - Correct Answer C Corporation
Similar to a C Corporation, but taxed at a lower rate - Correct Answer S Corporation
Owned by no one; pays no U.S federal tax - Correct Answer Nonprofit Corporation
Best for a single member seeking low risk - Correct 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? - Correct 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? - Correct 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. - Correct 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? - Correct Answer SBA
