ESB Certification 2

A rancher is preparing to retire. He is considering selling half of his land and giving the other half to his children. He hears that development for a ski resort was just approved on land adjacent to his property. Which viable business opportunity does the retiring rancher foresee?

"An increase in land value".

Which two are benefits of using Angel investors to help start a business?

"Angels often accept a lower return on investment compared to other sources of equity capital" and "Angel investors typically do not expect to be paid until the business begins making money".

Which tool is most useful in helping Customer Service support sales strategies?

"CRM (Customer Relationship Management)".

Which is the primary characteristic of all physical and digital channels?

"Closing sales".

What is a primary benefit of starting a new business without purchasing a franchise or buying an existing business?

"Developing your own rules".

Which of these is a characteristic of a successful entrepreneur mindset?

"Doesn't give up easily".

Match each Pricing Strategy to its corresponding description.

"Economy Pricing": Prices that targeting customers looking to save as much money as possible. "Bundle Pricing": Pair several products together and selling them for less money than each would be individually. "Market Penetration": Setting prices low until after a reliable customer base is established, then raising prices. "Price Skimming": Setting high prices when a product is introduced and then gradually lowering the price. "Premium Pricing": High quality products marketed to high-income individuals.

Which three are online marketing platforms?

"Email", "Google ads", and "Social Media".

In general, which two characteristics define a "small" business?

"Fewer than 1,500 employees" and "less that $35.5 million revenue".

Which is one of the greatest risks of being an entrepreneur?

"Financial instability".

You create a new strategy for lawncare services that involves assessing lawn health, applying the correct herbicides and pesticides and other necessary solutions to quickly bring a lawn back to health. What are three things you will need to consider regarding the mass delivery of your service?

"Finding a source of materials to support your service", "Training employees with the knowledge to consistently deliver the service", and "Creating an effective demonstration of your service for potential customers".

Which expense is a variable cost?

"Hourly wages for an office employee".

You have an idea for a new service. Market research suggests the service is needed to solve a problem and will be enthusiastically embraced by customers. What is one of the first steps you must do before offering a new service?

"Identify knowledge required".

Which of the following is an example of Primary Data?

"Information collected from a poll of your company Facebook followers".

You have opened a for-profit adult technical school and you want to advertise it to potential students throughout your state. Which marketing method would be most appropriate?

"Local Television Ad".

Match each Stage of the Business Life Cycle to its corresponding description.

"Maturity": The business is separate from the owner with responsibilities delegated to staff. A business in this stage usually commands a considerable share of the market and may even be a household name. "Success": Company is stable and profitable. "Takeoff": Expansion strategies are implemented, and investment is balanced with potential. "Survival of the Fittest": Focus shifts to revenue, expenses, and growth. Cashflow is the major issue. "Existence": The business introduces itself to the market and attempts to catch the attention of potential customers.

A bakery has developed a new artisan bread. The staff are giving away taste samples to customers as they enter the store. What are two criteria the bakery can use to determine the quality of their new product?

"Measure sales of the new bread after customers have sampled it" and "Observe customer reactions while they taste the product".

Which two are segments in a Marketing Plan?

"Psychographic" and "Demographic".

You downloaded several of your favorite songs and used them in an ad to promote your product on social media sites. The ad was rejected because of the song you chose. You are told that you violated Fair Use copyright. Which three are factors used to evaluate Fair Use copyright?

"Purpose of your use", "Effect of your use on the potential market of work copied", and "Amount of the work copied".

Your company is manufacturing a new product. You need to establish a Product Quality Control Process. What are three things you must do to create and establish your Product Quality Control Process?

"Review the results of internal quality assurance testing", "Determine what standards have to be met based on the product and industry", and "Establish the method to use for testing product quality".

You own a lawn care business. You have employees who work long hours laboring in good weather, often exceeding 40 hours per week. They also work short hours when the weather is bad, sometimes they can't work at all. You do all of the sales for your business. Which two types of compensation would be appropriate for these landscape employees?

"Salary" and "Hourly".

Which three components are characters of a Pitch Deck?

"Used to Get Investors Attention", "10 - 20 Slides", and "Highly Visual".

Which are two characteristics of fulfillment centers differ from direct distribution?

"Warehousing is a primary role" and "Fulfillment centers pack and ship for a manufacturer".

Which two types of Sales Channels sell primarily to other businesses?

"Wholesale" and "B2B".

A barber charges $20.00 per haircut. The total cost for running his home-based business is $4,000.00 per month, which included his salary of $3,000 per month. The minimum number of haircuts he must do to cover all of these expenses and his salary is 200 per month. The barber wants to increase his salary to $4,000 per month, making his total monthly expenses $5,000. What is the minimum price he much charge for each of the 200 haircuts so he can cover this increased salary?

$25 Total monthly costs of $5,000 divided by 200 haircuts = $25 per haircut.

A local restaurant prides itself in having a high number of return customers. To build loyalty, the owner of the restaurant offers a free Prime Rib dinner (value $20) to any customer who purchases a meal during 10 previous visits. Meal purchased are tracked by stamps on a Loyalty Card. At the end of a month, the owner decides to calculate the customer retention cost. The data is the following: Number of Customers at Start of Month = 100 Number of Customers at End of Month = 120 Number of New Customers = 40 Value of Free Dinners Redeemed = $240 What was the Customer Retention Cost?

$3 To calculate customer retention, evaluate the number of customers at the end of a time period. Subtract the number of new customers acquired. The difference is the number of customers retained from the previous time period. To calculate customer retention cost, divide the cost of all free meals redeemed by the number of retained customers. Step 1: 120 customers at end of month - 40 new customers = 80 Retained Customers Step 2: $240 Free Dinners Redeemed / 80 Retained Customers = $3 Customer Retention Cost

You have a handyman services business. You have the following financial information for the month. Initial cash balance: $1,500 Projected revenue based on existing clients: $2,500 Gas: $100 Equipment maintenance fees: $300 Truck payment: $400 Payroll: $3,000 Insurance: $120 What is your projected ending cash balance for the month?

$80 (Initial Cash Balance + Projected Revenue) - Projected Expenses = Project Cash Balance ICB ($1,500) + PR ($2,500) = $4,000 Projected Expenses are gas ($100) + equipment ($300) + Truck payment ($400) + Payroll ($3,000) + Insurance ($120) = $3,920 $4,000 - $3,920 = $80

The owner of an organic pet food store would like to analyze the sales data to determine if the business is growing, declining or remaining flat. The owner has the following data: Sales Revenue Last Year = $350,000 Sales Revenue Current Year = $402,500 What is the sales growth?

15% To calculate sales growth, subtract sales revenue for the last year from the current year and divide that by the sales revenue from last year. Multiply the result by 100 to get the sales growth percentage. $402,500 - $350,000 = $52,500 $52,500/$350,00 = 0.15 0.15 x 100 = 15%

Complete the sentence about business documents by selecting the correct option from each dropdown list.

A "Business Plan" is a multi-page document describing and detailing a business. A slide presentation for potential investors that summarizes the key items of a business is called a "Pitch Deck". A "Lean Canvas" is a single-page business summary template that was created by Ash Maurya.

You need to create a legal structure for your small business. You have plans for it to grow and hope in the future to sell shares to the public. Your startup partners are citizens of Mexico and Japan. You do not want to be personally responsible for business liabilities. Which legal structure should you set up for your business?

C-Corporation

Match each of the following business management role to its corresponding description: CIO CEO COO CFO

CEO (Chief Executive Officer): The highest-ranking employee in the company; reports to the board of directors. CFO (Chief Financial Officer): Creates budgets, analyzes financial data, and forecasts company profits. CIO (Chief Information Officer): Develops policies and structures to protect company data. COO (Chief Operating Officer): Oversees the day-to-day administrative functions of a business; second in command.

You own a mobile Taco Truck. You have a short list of competitors. Classify the following competition as either Direct Competition or Indirect Competition.

Direct Competition: "A local Taco Bell franchise" and "Walk-up Mexican Food stand". Indirect Competition: "A local Burger King franchise" and "Mobile Fish and Chips Truck".

Match each Asset or Liability to its corresponding category on a Balance Sheet.

Long-Term Assets: "Equipment" Current Assets: "Inventory" Current Liabilities: "Bank Loans" Long-Term Liabilities: "Mortgage Payments"

Classify each of the following businesses as either "Physical" or "Digital".

Physical: "Bakery in your community" and "Hair salon that makes appointments online". Digital: "Online store that dropships camping gear" and "Bookstore on Amazon that sells eBooks".

Place the Elements of a Sales Process in the correct order.

Step 1: Prospecting Step 2: Preparation Step 3: Approach Step 4: Presentation Step 5: Handling Objections Step 6: Closing Step 7: Follow-up

For each statement about Product/Market Fit, select True or False.

True: "A fit exists when people need your product rather than just seeing a potential benefit of using it", "Before hypothesizing a solution, first determine if there is a problem worth solving", and "When users love your product so much they tell other people to use it, you have product/market". False: "Startups should develop a growth hypothesis before testing their value hypothesis".

For each statement about the Design Thinking Process, select True or False.

True: "Assumptions are challenged and ideas are created in the Ideate phase" and "Problem statements are written in the Define phase". False: "The Empathize phase tests solutions to users' problems" and "Building Prototypes is the final phase of the Design Think Process".

For each statement about requirements to Obtain Funding, select True or False.

True: "Bootstrapping requires the owner(s) of the company to provide all of the funding" and "equity financing requires a business owner to give up control of the business to obtain funding". False: "Lenders do not require owners to identify the purpose of the loan" and "the business owner's personal credit score does not affect their ability to qualify for a loan."

For each statement about Start-Up Costs and Operating Costs, select True or False.

True: "Logo and website design are examples or start-up costs", "Operating costs include payroll", and "Building improvements should be calculated into start-up costs". False: "Business insurance is a start-up cost" and "Operating costs include your down payment on rental property".

For each statement about the Selection of Distribution Channels, select True or False.

True: "Products that are bulky or large in size are usually sold directly by the company to their consumers" and "Technical and complex products are best sold through direct distribution". False: "Product price has no affect on the length of a distribution channel" and "The geographic location of customers does not require different distribution channels".

For each statement about SWOT Analysis, select True or False.

True: "Threats identified in a SWOT Analysis are the most difficult element to mitigate" and "Acting on weakness identified in a SWOT Analysis can be challenging but often necessary to grow business." False: "Opportunities identified in a SWOT Analysis are not meant to be actionable" and "Strengths identified in a SWOT Analysis are new actions a business should implement".

For each statement about trademarks, trade secrets, copyrights, and patents, select True or False.

True: "Trade Secrets are confidential information which may be sold or licensed" and "A Trademark protects a brand name". False: "A Copyright is used to protect a company logo" and "A Patent is used to protect an original work, like music".