Specimen test paper loses everyone at the outset (7)
I believe the answer is:
example
'specimen' is the definition.
(I've seen this before)
'test paper loses everyone at the outset' is the wordplay.
'test' becomes 'exam' (synonyms).
'at the outset' says to take the initial letters (the outset is the beginning).
The first letters of 'paper loses everyone' is 'ple'.
'exam'+'ple'='EXAMPLE'
(Other definitions for example that I've seen before include "Instance, specimen" , "Specimen, sample" , "Illustration or model" , "Representative object" , "Precedent" .)