Practice: Roles, Compensation, and Business Life Cycle

A person who originally created a company but now has no daily management role best describes which business role?

• Manager

• Investor

• Founder

• Advisor

A salesperson earns $2 for every unit she sells, with no guaranteed base pay. Which compensation structure does this describe?

• Commission

• Profit-sharing

• Bonus

• Salary

A graphic designer completes a logo project for a business, sets her own hours, and pays her own taxes. She is best classified as which type of worker?

• Board member

• Full-time employee

• Salaried manager

• Independent contractor

A startup just released its first product, has a small customer base, and is focused on proving its business model works. Which life-cycle stage is this company in?

• Startup

• Decline

• Growth

• Maturity

A business owner is building a compensation package to attract employees. Which TWO of the following are examples of benefits rather than direct pay?

• Paid vacation leave

• Hourly wage rate

• Sales commission percentage

• Health insurance coverage

An outside expert is brought in to give a company guidance on entering a new market but has no voting power over business decisions. This person is best described as an:

• Owner

• Investor

• Board member

• Advisor

A company's sales have flattened, competition is strong, and leadership is deciding whether to innovate or consider selling the business. Which life-cycle stage does this represent?

• Growth

• Startup

• Seed

• Maturity

At the end of a strong quarter, all employees receive a percentage of company profits added to their regular pay. This is an example of which compensation type?

• Equity

• Commission

• Stock options

• Profit-sharing

A group of elected individuals has the authority to vote on major company decisions and oversee executive leadership. This group is called the:

• Management team

• Investor consortium

• Board of directors

• Advisory panel

A business is in the decline stage of its life cycle. Select all that apply: which actions are typical priorities at this stage?

• Evaluating options for renewal or exit

• Securing initial seed funding

• Expanding into new international markets

• Cutting costs to extend survival