ESB EXAM Study Guide

ESB EXAM Study Guide 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 feeli ...

ESB EXAM Study Guide 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