ESB Jan. Practice Test

What is the difference between direct and indirect competition?

• Direct competition sells the same products, while indirect competition sells different but similar products
• Direct competition sells products that are different from yours, while indirect competition sells the same products
• Direct competition sells the same products, while indirect competition sells products that are different from yours
• Direct competition sells different but similar products, while indirect competition sells the same products

What is the key objective of small businesses?

• To generate profit
• To take on new business opportunities
• To provide equity
• To stick with what the business currently does

What is a Lean Canvas?

• A written plan that outlines a company's marketing strategies
• A one-page document discussing key information commonly seen in a business plan
• A form of communication between businesses and customers
• A liability owed to an entity

What is the definition of LLC?

• Two or more individuals that share a business's financial responsibility
• A business with pass-through taxation where owners pay taxes on the company's profit and losses through their personal taxes
• The expenses incurred for running day-to-day tasks in a business
• The individuals that own the business

What is the purpose of a marketing plan?

• To provide a brief overview of the business plan to potential investors
• To protect an invention for a limited time
• To act to work toward achieving a goal
• To outline a company's marketing strategies

In the context of a Lean Canvas, which two elements are essential to include when summarizing a business plan?

• The individuals that own the business
• The expenses incurred for running day-to-day tasks
• A written plan that outlines marketing strategies
• A one-page document discussing key information
• The amount of money owed to an entity

Which business structure is characterized by pass-through taxation and limited liability for its owners?

• S Corporation
• Sole Proprietorship
• Nonprofit
• LLC

What is the purpose of a Marketing Plan?

• To protect a company's inventions for a limited time
• To calculate a company's run rate
• To document a company's strengths, weaknesses, opportunities, and threats
• To outline a company's marketing strategies

How does a Prototype differ from an MVP?

• There is no difference, they are the same thing
• A prototype is for internal use only, while an MVP is sold to customers
• A prototype is a preliminary product to test and develop, while an MVP is an inexpensive preliminary product to test the product idea
• A prototype is a fully developed product, while an MVP is at the idea stage

What is an entrepreneur willing to do?

• Generate profit
• Stick with what the business currently does
• Provide equity
• Take risk