ESB Certification Exam Study Guide
Questions with 100% Correct Answers
The key objective of a small business owner is to generate ____ Correct Answer:
profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to
grow their businesses rapidly Correct Answer: risks
Tangible items that require pick-up or delivery are ____ products Correct Answer:
physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction Correct Answer: customer
____ are for-profit corporations with limited liability Correct Answer: S
corporations
____ are ideal for international businesses Correct Answer: C corporations
The ____ oversees daily operational and administrative functions Correct
Answer: Chief Operating Officer
A ____ votes on the management of a company Correct Answer: stockholder
____ employees are paid a fixed amount each pay period Correct Answer:
Salary
Businesses can compensate employees for work they produce when being paid
by ____ Correct Answer: piece work
Businesses can offer ____ in addition to a lower salary Correct Answer: 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 Answer:
survival
The owner may decide to sell their ownership in the company during the ____
stage Correct Answer: exit plan
The five elements of the design thinking process are ____ Correct Answer:
empathize, define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective Correct
Answer: Empathy
The design team creates multiple inexpensive versions of a product, known as
____ Correct Answer: Minimum Viable Products
Name benefits of a franchise Correct Answer: less risk involved, tested
operational processes, or recognized brands
No ownership, no US federal taxes Correct Answer: Non-profit
Best for international business even with being double-taxed Correct Answer: C
corporation
Easy to create but comes with unlimited liability Correct Answer: Sole
proprietorship
Lower tax rate that prevents the company from being double-taxed Correct
Answer: S corporation
Ideal for a single owner seeking low risk Correct Answer: LLC (limited liability
company)
Shared financial backing Correct Answer: Partnership
, Creates the company Correct Answer: Founder
Oversees company finances Correct Answer: CFO
Owns stock in the company Correct Answer: Stockholder
Reports to the board of directors Correct Answer: CEO
Oversees daily operational and administrative functions Stakeholder Has a
vested interest in the success of the company Correct Answer: COO
Has a vested interest in the success of the company Correct Answer:
Stakeholder
Non-cash compensation Correct Answer: Equity
Set rate of pay for hours worked Correct Answer: Hourly
Usually found in sales roles Correct Answer: Commission
Set amount of pay in a given period Correct Answer: Salary
List the correct order of the business life cycle stages Correct Answer: 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? Correct Answer: 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? Correct Answer: Existence
Questions with 100% Correct Answers
The key objective of a small business owner is to generate ____ Correct Answer:
profits
Entrepreneurs are willing to take on new opportunities and unknown ____ to
grow their businesses rapidly Correct Answer: risks
Tangible items that require pick-up or delivery are ____ products Correct Answer:
physical
When a ____ purchases an item from a business, it is a business-to-consumer
transaction Correct Answer: customer
____ are for-profit corporations with limited liability Correct Answer: S
corporations
____ are ideal for international businesses Correct Answer: C corporations
The ____ oversees daily operational and administrative functions Correct
Answer: Chief Operating Officer
A ____ votes on the management of a company Correct Answer: stockholder
____ employees are paid a fixed amount each pay period Correct Answer:
Salary
Businesses can compensate employees for work they produce when being paid
by ____ Correct Answer: piece work
Businesses can offer ____ in addition to a lower salary Correct Answer: 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 Answer:
survival
The owner may decide to sell their ownership in the company during the ____
stage Correct Answer: exit plan
The five elements of the design thinking process are ____ Correct Answer:
empathize, define, ideate, prototype , and test
____ allows one to see and experience a customer's perspective Correct
Answer: Empathy
The design team creates multiple inexpensive versions of a product, known as
____ Correct Answer: Minimum Viable Products
Name benefits of a franchise Correct Answer: less risk involved, tested
operational processes, or recognized brands
No ownership, no US federal taxes Correct Answer: Non-profit
Best for international business even with being double-taxed Correct Answer: C
corporation
Easy to create but comes with unlimited liability Correct Answer: Sole
proprietorship
Lower tax rate that prevents the company from being double-taxed Correct
Answer: S corporation
Ideal for a single owner seeking low risk Correct Answer: LLC (limited liability
company)
Shared financial backing Correct Answer: Partnership
, Creates the company Correct Answer: Founder
Oversees company finances Correct Answer: CFO
Owns stock in the company Correct Answer: Stockholder
Reports to the board of directors Correct Answer: CEO
Oversees daily operational and administrative functions Stakeholder Has a
vested interest in the success of the company Correct Answer: COO
Has a vested interest in the success of the company Correct Answer:
Stakeholder
Non-cash compensation Correct Answer: Equity
Set rate of pay for hours worked Correct Answer: Hourly
Usually found in sales roles Correct Answer: Commission
Set amount of pay in a given period Correct Answer: Salary
List the correct order of the business life cycle stages Correct Answer: 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? Correct Answer: 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? Correct Answer: Existence
