ESB Questions
Which of the following are considered fixed costs? (two)
Weekly newspaper ads, monthly machine fees
Stacy runs a gardening supply store, Her beginning cash balance was $3,000. Her equipment costs were $3,600. Her loan payments were $4,800. Her other expenses were $15,000. Her total cash sales were $23,500. What is her ending cash balance?
$3,100
A fishing expedition company has $30,000 in cash, For the upcoming month, the company is projecting selling $5,000 worth of tours, $3,000 in equipment expense, $500 in insurance, and $500 in licensing fees. What is the company's projected cash flow at the end of the month?
$31,000
The owner of Rick's Sandwich Shop is trying to attract customers from his competitors. Which strategy will best identify those customers when they arrive at the shop?
Accepting competitors coupons
Buy a franchise
Brand success and royalty payments
Sarah runs Doggy Day Care. Sarah has decided that once the new part of the business turns a profit that she will consider it successful. Which milestone can sarah use to measure the profitability of the dog grooming aspect of her business?
Break-even point is exceeded by revenue
Start a new business
Build a unique own way and inherent risk
Sally is looking to open a videography business. She needs to impress a group of potential investors with a presentation that includes a value proposition which three items should be included in Sally's value proposition?
Business overview, service to customers, and differences between competitors
Bruce is an experienced mechanic that grew up in a family of entrepreneurs. He has decided to open an auto shop that specializes in alignments, repairs, oil changes, and warranty work for rental fleets, leasing companies, and auto dealerships. Which customer group will Bruce's company support?
Businesses
A non profit organization needs a new director with at least 10 years experience. The organization has only been around for a year. Which factor could hinder the hiring process?
Can the organization afford an attractive salary?
Copy right
Custom prints
Many of Fran's customers complain about a lack of available flooring companies in the area and that of those companies, the prices are too high. what can be a good marketing strategy?
Lower prices
Johnny's Deli wants to develop closer relationships with its customers to encourage repeat business. Which would best accomplish the goal of creating close relationships and encouraging repeat business?
Offer free items for those who receive the monthly newsletter
In the past year, Sandra's Salon has expanded by gaining a tanning bed. This has helped improve business, but Sandra wants to retain more customers and build loyalty among her client base to keep them from choosing any of her competitors. Which three options would best retain customers?
Offering existing customers a 50% discount for referring a new customer, sending existing customers reminders about the importance of regular haircuts, and sending existing customers a 10% discount for their next tanning session
Identify the two top benefits of using angel investors to start a business.
Only when a business starts to make money does an angel expect to be paid back; Accepts a lower investment return
Janes owns a food truck and wants to purchase two more food trucks to expand and reach more clients. Of the business plan types, which three are best suited for investors?
Oral presentation, Investor's business plan, and executive summary
Carl has created a new device that makes cake decorating easier. Which item should carl use to protect his intellectual property?
Patent
After a self-assessment, Peter realizes he wants to start a plumbing business, but doesn't want to risk a lot of his own money. What would be his best option?
Purchase an existing business
Identify the agency that solely focuses on uniting mentors with business owners to offer them free advice on how to operate their business
SCORE
Tad, Alex and Melissa are partners in a small app development company. They are creating milestones to measure the first-year growth of their business. WHich item would best be used to determine their business's growth?
Sales
Owen needs to hire a new employee that is both dependable and can work independently. Which factor will play the biggest role in who Owen hires?
Whether or not the performance of the individual can be assessed
Lois and her new company have met with outstanding success. She now needs to outsource in order to save money. Which item should lois outsource?
Administration of benefits
Sole proprietorship
Easy to create, but with unlimited liability
Which of these costs is most likely a fixed cost?
Exam fees
Harvesting
Exchanging ownership for cash, either by acquisition or merger
Buy an existing business
Existing customers and expensive
Autumn runs a child daycare and wishes to expand her facility to better meet the needs of her customers' schedules. Which is the best value proposition for her customers?
Extended hours for drop-off and pickup
Talking to people in a store
Face-to-face conversations
After a self assessment, Julie realizes she has no clue how to figure out whether her restaurant is profitable. What should Julie do?
Get some basic accounting knowledge
Cash
Government backed currency
Which is a drawback to starting a business from scratch instead of buying a franchise or pre-existing business?
Greater probability of failuer
A retiring hardware shop owner offers to sell his store to a competitor located on the south end of town. The competitor agrees to cash out the seller, merge the two businesses, and continue operating both locations. Which exit strategy is this an example of?
Harvesting
Which are two advantages of buying a franchise?
Marketing assistance and brand recognition
Posting information to Facebook
Marketing to online communities
Which is considered to be a great immediate benefit of being an entrepreneur?
More schedule control
Trade mark
New logo
Reaches local community, shrinking audience base
Newspaper
Increase of service
Ophelia discovers her competitor's turnaround time is double her turnaround time. What should Ophelia's new marketing strategy be to woo back her customers?
Nonprofit corporation
Owned by no one. owes no U.S> federal taxes
In writing a business plan, which part makes the most sense to put in the description section?
Target market
high impact but expensive
Television
Management buyout
Transferring ownership to people who already operate the business
Inexpensive but limited space
Web banners
Check
Written note used to instruct dispersal of funds
Annie's Diner is promoting a new seasonal burger. Which group of customers are most likely to purchase the new burger?
employees who work at nearby businesses
Which of the following are considered assets? (Two)
equipment, inventory
A skincare company employs 15 independent consultants. The company provides office space as needed, marketing materials for the consultants, and mentoring. Based on this information, which item should the company outsource?
internet services
Sales
revenue
How to sell service to a customer step 1, 2, 3, 4, 5
1) Determine whether the customer needs the service' 2) consult with the customer 3) Convince the potential customer to use the service 4) Offer incentive 5) ask for referral
Hiring process Step 1, 2, 3, 4
1) Identify required skills 2) Create the job description with desired requirements 3) Post an ad 4) Accept and review the applications
getting customers to buy from you Step 1, 2, 3, 4 ,5
1) Obtain a list of potential customers 2) Determine which potential customers to target 3) Contact potential customers 4) Close the sale 5) Complete the transaction
A freelance architect averages $10,000 per sale and needs to earn $20,000 per month to break even. Through experience, he finds that 10% of his potential customers buy within 30 days. What is the minimum number of prospects the architect needs to break even each month?
20
Bart wants to open a burrito house. Bart will average charging $7 per burrito. Each burrito costs $3 to make. It will cost $30,000 for Bart to start the business, $36,000 in first-year rent, and $30,000 in first-year operating expenses. How many burritos does Bart need to sell in the first year to break even?
24,000
Pierre wants to target business and holiday travelers whose schedules are often at the mercy of the airlines. Which is the best value proposition for Pierre's target audience?
24-hour access to his kennel
The owner of an antique store wants a loan for more space. The business is five years old, the owner has one outstanding loan, and the owner has a credit score of 499. What would be the most likely reason a loan would be denied?
Bad credit score
He has identified some potential customers who will not pay high prices. Given this information, which segmentation method is Gary using?
Behavioral
Limited liability company
Best for single owner seeking a low-risk environment
Which are considered rewards of being an entrepreneur? (Three)
Bigger community asset, Working the way one chooses, Better earnings
Upon researching the situation, Donnie decides to open a doggie daycare facility. Which marketing option for this new business should be a point of emphasis?
Location
An investor in Michael's landscaping business is concerned that the business is not growing fast enough. Which item would best help the investor understand how the business is growing?
New customers
Copy right
Photographs of products
Attending a Chamber of Commerce event
Sharing information with local businesses
Going to a trade show
Sharing information with others in your industry
Which description best fits an entrepreneur?
Willing to take risks
Xavier runs a coffee retail shop. His coffee inventory value was $1,000 to start the year. He bought 1000 bags at $8 per bag and sold $7,500 worth of coffee bags during the year. What is the ending inventory value?
$1,500
Maxine is projecting her cash flow budget for the coming month for her photography business .She charges $70 per session and is anticipating 20 sessions. Her beginning cash balance is $2,000. She is anticipating $900 in rent and $600 in supplied. What is her projected ending cash balance?
$1,900
Meredith is starting a cleaning business with a 3-year loan of $10,000, at a 5% compound annual interest rate. Assuming the loan is not paid back in full until the end of the 3-year term, how much will she owe at the end of her loan?
$11,576.25
A business has gross sales of $200,000, sales returns of $1,000, cost of goods sold of $39,000, operating expenses of $40,000, and Texas of 35%. What is the pre-tax profit?
$120,000
Thomas runs a shoe store. His beginning inventory balance was $15,000. During the year, he bought $3,000 worth of inventory and sold $4,000 worth. What is the ending inventory balance of the shoe business?
$14,000
Genevieve wants to start a seasonal fireworks stand and believes that after three months, her enterprise will cover its own costs. She needs $10,000 for initial expenses, plus 10% contingency, and then an additional 50% for cash reserves. How much does she need?
$16,500
A business has gross sales of $200,000, sales returns of $1,000, cost of goods sold of $39,000, operating expenses of $40,000, and taxes of 35%. What is the gross profit?
$160,000
A business has gross sales of $300,000, sales returns of $5,000, cost of goods sold of $40,000, operating expenses of $80,000, and taxes of 30%. What is the pre-tax profit?
$175,000
A window washer has taken out a $ 5,000 loan for 12 months with a simple interest rate of 5%. How much interest will be paid for this loan?
$250
Alberto is an expert colorist and wants to be sole proprietor of a salon and hair academy. He estimates his expenses to be $5,000 a month with a monthly income of $10,000. Since the bank's maximum debt ratio is 40%, how much would Alberto need to shave off his monthly expenses, while still achieving a $10,000 a month income, in order to meet the bank's 40% mark?
$4,000
Gunther, Fritz and Tobias are partners in a car audio business and are seeking to start a business in a new market. Customer demand and their combined experience shows that the new site will generate enough revenue to cover monthly expenses after three months. With a lease of $4,000 per month, a one-time licensing fee of $1,000, material supply expenses of $15,000 per month, and a 10% contingency, how much money in a startup capital do they need?
$63,800
A business has gross sales of $200,000, sales returns of $1,000, cost of goods sold of $39,000, operating expenses of $40,000, and taxes of 35%. What is the net profit?
$78,000
Loni wants to open a nail salon. Loni figured out that she can average charging $30 per session. Each session she does will cost her $10 in supplies. Over the first year, she has projected $24,000 in rnt and $50,000 in other expenses. The business cost her $15,000 to start. How many sessions does she need to do in the first year to break even?
4,450
Oliver charges $20 per lawn mowed. Oliver's operating expenses are $1,000 per month. How many lawns does Oliver need to mow per month to break even?
50
A sprinkler system company opens a new location in a suburb that has endured a long history of poorly installed water and irrigation systems. What would be the most effective way for this company to gain the trust of the neighborhood?
72-hour rapid response time for all repairs
ESOP (Employee stock ownership plan
A business owner sells ownership to a retirement fund for the employees
In the last 10 years, Ronnie has moved five times to five different states. What about Ronnie could hamper potential success for this business?
A lack of patience
Line of credit
A loan to purchase now and pay later
Patent
A new type of milk steamer
Tenacious
A willingness to see things through
Courage
A willingness to take risks despite possible losses
David has recently taken over the Johnson family business feed store. Due to a decrease in ranch customer sales and an increase in smaller lots with pets, which action would increase the sustainability of David's business?
Add a line of products catering to traditional house pets
Al's street sweeping business has expanded to include oversized trash pickup and snowplowing services in the winter. He has numerous potential customers requesting his services. Which of these customers will generate the highest gross revenue for the next year?
Apartment complex paying $450 monthly
Rey often is dissatisfied with the stagnation of her job and wants to open her own transportation service. Which benefit of entrepreneurship will be the biggest one for Rey?
Autonomy
Lucy runs a coffee shop with its own unique coffee blends. The supply chain for each base coffee bean is slow at best. Given this information, which part of the supply chain should Lucy focus on?
Between her coffee shop and the base coffee bean suppliers
Behavioral
Boat owners that are looking for discounts and promotions on cleaning services
Psychographic
Boat owners that do not have time to clean their own boats
Geographic
Boat owners that live near the business
Demographic
Boat owners that make more money
A corporation and its shareholders all pay taxes. What corporate structure do these tax implications define?
C corporation
Hector is looking to open an ice cream shop in a mixed-use development downtown. Which of the following documents must he obtain for his staff?
Certificate
Jay runs a successful high-end salon downtown and is looking to open a new location in a nearby suburb. He wants to research nearby competitors before committing. Where should the business owner go to obtain a list of nearby high-end salons?
Chamber of commerce
The owner of a small successful sign shop has died and left the business to her children. Neither child wishes to run the business, and they put it up for sale. The shop has a book value of $902,300 and has annual earnings of $1,236,000. Offers have been submitted from four different companies. Choose the best offer.
Company c has offered to pay three times the book value
As a musician, Susan writes and records music weekly. Which intellectual property protection should Susan use to protect her musical creations?
Copyright
Meg used a number of images from an online source for her website's design. She was later sent a letter notifying her of _______ infringement. She was forced to remove the images.
Copyright
Which is a benefit of starting a business versus buying a franchise or pre-existing business?
Create your own rules
Which two characteristics best describe entrepreneurs?
Creative and adaptable
Which of the following are considered variable costs? (Two)
Credit card processing, inventory
JD is the head cook of his own restaurant. He has a number of assistants that he has taught to run every station of the kitchen, including his own station. This is an example of which business practice?
Cross-training
Thea needs to increase the sustainability of her shaved ice stand of eight years. Which item would increase her business's sustainability the most?
Determine the factors that drives sales for her business
Initial public offering (IPO)
Dividing ownership of a privately held company into shares sold to the public
C Corporation
Double-taxed. but ideal for international businesses
Online Networking
Each day, Donnie posts the progress of her new building to Facebook as a countdown to opening her business. What type of networking is Donnie using?
Debit
Electronic deduction from an existing account
Cost effective but ignored
Phyllis opens a new pet store in a growing area of town but the new store fails and closes after a year. How should Phyllis best handle this?
Evaluate why the business failed and use the knowledge for the future
What advantage does a general partnership carry over a sole proprietorship?
Financial backing is spread equally among multiple partners
George wants to take his passion for gold and open a golf academy. What would be benefits George could enjoy from this experience? (Two)
Financial gain and satisfaction of pursuing his passion
Todd is rejected for lack of collateral. Todd then turns to private investors in an effort to get the business started. What entrepreneurial characteristic is Todd exhibiting?
Flexibility
Frank runs a sandwich delivery company and is looking for new customers. A number of potential customers have moved into a new housing complex within his delivery limit. Which segmentation method is Frank currently employing?
Geographic
Phil needs to determine the demand for the services his business provides. Given this information, which two factors should Phil consider?
How many competitors are in the area? and What are the customer spending patterns in the area?
A well-conceived business plan benefits which groups the most?
Investors and Business owner
Bonnie owns a bakery to where she only uses locally grown ingredients. Recently, a new $15 per hour minimum wage has passed and, as a result, she has had to raise her prices substantially. Due to this, many customers are threatening to leave. Which two factors are contributing to her increasing prices?
Labor laws, higher material costs
A yoga instructor with no partners or employees wishes to protect himself from lawsuits. Which of the following legal structures would best fit his needs?
Limited Liability company
Which three factors affect a person's credit?
Lines of credit being used, amount owed on existing loans, payment history on loans and accounts
Charlie owns Doggy Day Care and needs to identify a value proposition that will help pet owners feel secure about using his services. Which two items will provide Charlie's customers with a sense of security and assure their pet's safety?
Live webcam access via the internet, references from other pet owners
Which are considered risks of being an entrepreneur? (Three)
Long hours, financial instability, and possibility of failure
Clifford is a regulatory consultant that provides guidance for several medical tech companies trying to get their devices approved by the FDA. Some of these companies are direct competitors. If Clifford breaks confidentiality agreements and discusses the details of one company's device with one of their competitors, what would be the most likely consequence?
Loss of clients and possible legal action
Nichole has invented a new cake decorating device. She has been selling the product for a while, but due to an increase in production costs. She will barely break even. Which item should be addressed in Nichole's supply chain?
Negotiated costs
Damon wants to implement a marketing strategy that will increase his photography's business' sustainability. Which strategy should Damon implement?
Offer a punch card for a free sitting after a certain number of orders
Damon is researching the business options available in order to turn his photography hobby into a business. He surveyed 100 potential customers who provided the following information: 20% prefer a photographer with online samples, 60% prefer a photographer from a studio, and 10% would prefer to go to a photographer they have been referred to. Given this information, which opportunity would give Damon the highest probability of success?
Opening a studio with a gallery of sample work
Bob's Bowling Alley is looking to start multiple bowling leagues in the surrounding area for an upcoming tournament. Which form of communication would achieve the goal?
Promotional discount
Which are the three reasons to buy a franchise instead of starting a new business?
Proven business model, guaranteed income, easier to finance
Marcus runs a business designing large outdoor fountains. A new client has requested a project that would require $6,500 to produce. Even though his loan request was rejected by the bank, he still wishes to be the sole business owner and does not want to sell shares to raise capital for the project. He also does not want to lose this new customer. What would be the ideal route to pursue these funds?
Request an advance payment from the customer
Which three things are defined when doing a self-assessment?
Risk tolerance, strengths, and weaknesses
A landscape architect wishes to start his own business constructing custom water features. This is his first venture and requires assistance drafting a business plan, securing capital, and receiving overall general guidance. Which of the following agencies should he go to first?
SBA
Toni runs a pet supply business. She ships products she orders from suppliers directly to customers. Which of these costs is a variable cost for Toni?
Shipping
Dakota is performing a survey of 100 potential customers for her travel booking business that specializes in cruise ship vacations. The survey revealed that 15% would book flights, which adds $300, 10% would book rental cars, which adds $100, 15% would book a hotel before or after the cruise, which adds $300 per guest, and 60% of her customers would book shore excursions, which adds $300 per guest. Based on this information, which add-on should Dakota promote from a revenue perspective?
Shore excursions
S Corporation
Similar to C Corporation, but enjoys a lower tax rate
Inexpensive but requires ongoing presence
Social media
Paul must pay self-employment tax due to the legal structure of his business. This means that Paul's business has a(n) _______ structure
Sole proprietorship
Bob decided he wants to capitalize on the success of an indie film. He builds a retail site that sells various products for fans of the movie. Given this information which item should concern Bob the most?
Supply reliability
Administration of benefits
Taxes on the income earned is the responsibility of the business owners
Identify why maintaining strong ethics practices for a business is a good idea from a legal standpoint.
To avoid potential lawsuits
Ed's ATV Repair has grown into a successful business. He is looking to offer several promotions to kick start the upcoming off-road season. Which communication will reach the largest number of Ed's potential customers?
Tv advertisements
Identify the major downside to a sole proprietorship
Unlimited sole proprietorship
Joan runs a computer training business. Her electric bills have almost doubled in the past year, causing her to consider raising prices. Which type of cost is Joan concerned about?
Variable
Heinrich lives in a county of spread-out rural communities. For one community located on the county line, he realized residents there must endure a 90-minute round-trip commute to the nearest grocery store. He thinks he could serve their needs by opening a country store there, and notices a real estate listing for an old residence that might be the perfect site. WHich of the following will he need to obtain before proceeding?
Variance
Which document will show the book value of a company's equipment at the end of a fiscal year?
balance sheet
materials
costs of goods sold
Which is considered to be the largest risk of being an entrepreneur?
loss of money
Which is considered a long-term liability?
mortgage payments
Amy has a successful wedding planning company and wants to personally market her services during a wedding exposition she will attend. Which form of communication best fits Amy's needs?
networking
Timmy owns The Pasta Palace and serves the best food in town, but his prices are a bit higher than his competitors. Recently, one of his competitors began honoring his coupons in an effort to attract new customers. Timmy wants to increase the number of his return customers by reminding them that the quality he offers is worth the price. Which strategy might increase Timmy's number of return customers?
offering a free birthday meal
rent
operating expense
Andrew owns a successful art space and would like to build a 30-foot x 40-foot retail gallery section while maintaining the existing art space. He's already researched the zoning requirements and has concluded that a retail space is permitted. What would Andrew need to obtain before proceeding with his expansion plan?
permit
Besides defining strengths and weaknesses, what is the other main factor determined during a self-assessment?
risk tolerance
Tony is starting a dog washing business and is trying to gain customers. He has only secured two customers so far and would like to get more soon. He has prepared a sales pitch for potential customers, practiced his speech and is prepared to deliver the service if a potential customer becomes an actual customer. Which step in the sales process has Tony overlooked?
setting up the sales meeting
Missy runs a bowling supply shop. She has a sign that says cash-paying customers get 3% off. What is the most likely reason for this?
to offset credit card processing fees
Value achievement
The desire to succeed over the desire of money
Projected revenue is $10,000. Operating expenses are $7,000. Rent is $2000. $2,500 in cash is on hand. What is the: 1- cash inflow 2- cash outlaw 3- Available cash 4- Ending cash balance
1. $10,000 2. $9,000 3. $2,500 4. $3,500
Shea runs a carpet cleaning business. The average cost to Shea per cleaning is $30. Shea charges $60 per cleaning. Shea's fixed plus variable costs per month total $1,500. How many carpet cleanings does Shea need to do per year to break even?
600
Which entrepreneurial trait best deals with ambiguity?
patience
Which are traits of a successful entrepreneur? There's three.
patient, confident, enthusiastic
Lois has decided to open a corporate training business. After assessing what job roles will be needed, she has determined that there will be four labels of employees that she has organized into a chart. Which role should she be able to expect from the employees at the top of the chart?
Building a board of advisors and creating succession plans
Susan has always dreamed of running her own flower shop. Before opening shop, she wanted to do some research. She surveyed 100 potential customers who provided the following information: 20% would prefer to place orders online, 50% would prefer buying from an existing florist. Given this information, which opportunity would have the highest probability of success?
Buy an existing business and offer online ordering
Mac is an auto mechanic that specializes in transmission repairs. These repairs sometimes reach as high as $5,000. Potential customers leave because they do not have enough money readily available. Which operating policy should Mac adopt in order to establish a clientele base and acquire their business?
Offer payment terms for transmission services on approved credit
Mark runs a pet supply store. Due to recent changes, he needed to hire a business manager who handles all of the record keeping, scheduling, and bills. Mark retained activities related to payment authorization, check signing, and working with customers and other employees. This is an example of which operating procedure?
Separation of duties
Mac decided he wants to add a new brand of computers to his computer store. This will require more space and more inventory. Mac wants two short-term loans: One for inventory and one for operational expenses. Why is it likely a bank would approve the first loan but not the second?
The operational expense loan has no collateral
All good business plans should address which of the following Cs? (Three)
Customers, capital and concept
Chris is a recent technical college grad with certifications in ATV and OHV engine repairs. He has raised $80,000 in order to start his own business. He lacks professional and business experience, however he has more than five years' experience repairing ATVs for family and friends in addition to the two years' experience from school. After surveying 100 potential customers, Chris has learned the following information: 10% do their own repairs, 40% want repairs done by an ATV/OHV dealership, 50% want to use an automotive or other mechanic, and additionally 70% of the customers surveyed indicated they wanted modern computer diagnostics regardless of who did the repairs. The survey also revealed how much customers currently spend on repairs: $100 or less when completing their own repairs, $100-$300 when completed by an automotive mechanic, and $200-$500 dollars when completed by a dealership. Given this information, which would be the best opportunity for Chris to pursue?
Open a new shop and invest $50,000 in modern diagnostic equipment
Larry has a papercraft hobby and wants to make some money off of it. He wants to sell custom greeting cards and other items from his home. After surveying 100 potential customers, Larry discovered the following ordering preferences: 25% would prefer to place orders using social media, 15% would prefer to order using the phone, 45% would prefer ordering from a dedicated business website, and 20% would prefer purchasing from an auction website. He also learned what customers are willing to spend on his custom designs: 20% would spend $50 or less, 40% would spend $50-$100, 30% would spend $100-$150, and 10% would spend $150 or more. Given this information, which opportunity offers the highest probability for success?
Open an online business
Self-reliant
The ability to consistently believe in the entrepreneurial dream