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MACROECONOMICS

The study of an overall economy as a whole entity, such as a national economy. To understand the behavior and interrelationship of major segments, such as industries or markets. Contrasted with MICROECONOMICS.

MAILING LIST

A record of customers or prospects, with complete addresses and telephone numbers, used for advertising solicitations or any other purpose.

MAIL ORDER

A method of retailing whereby goods are ordered by mail or telephone then delivered by the postal service or private delivery service.

MAINTENANCE

The care and work necessary to keep something in the usual operating condition for productive use; general repair and upkeep.

MAJORITY

As related to small business, the one who holds more than 50 percent of a transaction, as a majority stockholder or a majority interest in a real estate deal. The opposite of a MINORITY. The age at which a person is no longer a minor and is thus able to enter into contracts freely. The age of majority in most states for contract purposes is 18. In a vote, more than half of those voting or more than half of those present and authorized to vote.

MAKE-OR-BUY DECISION

The evaluation of whether a part should be produced by your company or purchased from another company. Factors to consider include production cost, reliability, quality, dependability and available capacity.

MAKER

The person (BORROWER) who executes a promissory note and thus becomes liable for payment to the PAYEE. See DRAWER.

MANAGE

To control the business operations; to conduct affairs in a business; to have charge of the business.

MANAGEMENT

The group of people in a business who MANAGE the business; people who make decisions and supervise operations for the owner of a business.

MANAGEMENT ACCOUNTING

The subfield of accounting that develops financial data for management analysis and decisions.

MANAGEMENT BY OBJECTIVE (MBO)

An art of management and technique whereby the actions of analysis, direction and control are focused on the end result.

MANAGEMENT TOOL

Any equipment, procedure or technique that enhances the efficiency with which the business operates.

MANAGING PARTNER

See GENERAL PARTNER.

MANAGER

A person who exercises the art of management; a person who directs or controls the work of other workers or a particular operation within the business.

MANIFEST

See BILL OF LADING.

MANUFACTURE

To produce goods from raw materials or other ingredients by the application of labor.

MANUFACTURER

A producer of goods from raw materials or other ingredients by the application of labor. See PRODUCER.

MANUFACTURING

The industry associated with producing new GOODS and MERCHANDISE. The process of producing products.

MANUFACTURING COSTS

The labor and material expenses incurred during the production of goods.

MANUFACTURING TECHNOLOGY CENTER

A not-for-profit shop, office or laboratory that promotes the transfer of technical knowledge to small businesses to enhance productivity and competitiveness. Manufacturing Technology Centers are a program of the U.S. National Institute of Standards and Technology.

MARGIN

In finance, the difference between selling price and some level of cost. Most often in small business, margin refers to sales less cost of goods sold expressed in dollars, called GROSS PROFIT, GROSS MARGIN or gross profit margin. In economics, the difference between one value and another value. In bank financing, the difference between the current market value of collateral and the loan amount. In purchasing shares of stock, the amount of money that must be deposited in an account at a stock brokerage for the purchase of shares of stock, with the remainder being borrowed from the broker. The stock becomes the collateral for the borrowed money. Sometimes expressed as the percent of the total amount that must be paid by the purchaser.

MARGINAL

Close to a limit; on the border between profitable and unprofitable, as in a marginal business. An economist’s term for a change in an economic factor as compared with the economic factor itself. Thus, marginal describes the relationship of the change to the economic factor.

MARGINAL COST

The increase or decrease in the total costs of a business due to a greater or fewer number of units produced.

MARGIN OF PROFIT

See PROFIT MARGIN.

MARKDOWN

A reduction from the original selling price; a downward adjustment in the value of securities. See MARKUP.

MARKET

As a noun, a public place where products or services are bought and sold. The aggregate of potential buyers; the equivalent of DEMAND. Short for MARKET VALUE. As a verb, to sell.

MARKETABILITY

The speed and ease with which a product or service could be bought or sold. In the sale of a business asset, marketability is interchangeable with LIQUIDITY, but liquidity implies preservation of original value.

MARKETABLE

A product or service easily bought or sold, such as assets that are easily converted into cash.

MARKETABLE SECURITY

An investment that is easily converted into cash, such as stocks or bonds.

MARKET ACCESS

The opportunity for a company to sell its products in a specific MARKET, considering competitiveness, regulations and trade restrictions.

MARKET ANALYSIS

Research aimed at predicting or anticipating the salability and profitability of a product or service, based on technical data about the product and the potential market. A study to define a company’s market. A forecast of market direction with a view toward sharing or exploiting new trends.

MARKET APPROACH

The general description of a company’s assessment and direction in a market.

MARKET CAPITALIZATION

The value of a corporation as determined by the market price of its issued and outstanding common stock.

MARKETING

Moving goods and services from the provider to the consumer. This involves advertising, publicity, promotion, pricing, sale and distribution of the goods and services. Also included is MARKET ANALYSIS to define the market.

MARKETING MIX

A selection of products by a single company to offer several options from which the customer can choose. The advantage to the business is that more customers will likely consider one of the options as opposed to purchasing from another company.

MARKETPLACE

A location where business is conducted. Same as MARKET, used as a noun. Marketplace also refers to all existing and potential customers.

MARKETING PLAN

That portion of a BUSINESS PLAN dealing with the marketing of the product or service; or similarly, a self-contained plan.

MARKET POSITION

The relationship of a single product or an entire company to others in a specific market; your product/company sales compared to the sales of another; your product/company sales expressed as a percent of the total sales in the market. With the knowledge of your product’s or company’s current market position, a strategy can be devised to improve your company’s market position. Descriptive terms are often applied to the market position, such as leader, challenger or follower.

MARKET POTENTIAL

The amount of sales that could be drawn from the total amount of customers.

MARKET PRICE

In business, the current prevailing value at which products or services are traded between buyers and sellers. See SUPPLY and DEMAND. In the securities market, the last reported price at which a security was sold; or in OVER THE COUNTER MARKETS, the combined current BID and ASKED prices.

MARKET RESEARCH

Exploration of the size, characteristics and potential salability of a product or service; determining what people want and need. Often market research is accomplished before developing the new product or service to determine the viability of the investment needed for development. Market research is an early step in MARKETING the product or service.

MARKET SEGMENT

That portion of the entire market that is the target of sales potential for a company.

MARKET SHARE

The percentage of industry sales that are sold by a single company or are attributable to an individual product. MARKET SIZE The total dollar amount of the potential sales to all customers in a given market.

MARKET STRATEGY

The overall long-range vision or scheme of masterminding the future course or direction of the marketing plan. Selection of the product mix and customer profile for maximum profit potential. Four elements (the 4 “Ps”) are often cited as important to effective market strategy, i.e., product, price, promotion and place (distribution).

MARKET VALUE

The price at which buyers and sellers trade similar items in the open marketplace. In accounting, the valuing of inventory at the current market price; or with the more conservative accounting principle, the “lower of acquisition cost or current market price.”

MARK OF ORIGIN

The prominently displayed physical nomenclature on a product that identifies the location where the product was manufactured, such as “Made in U.S.A.”

MARKUP

An amount by which the retail selling price of a product is greater than the purchased price or the cost of the services rendered, such as in retailing or wholesaling. Also called initial markup. Many times markup refers to the percent (rather than the amount) that the selling price is greater than the purchased price, such as a markup of 40 percent.

MATERIAL

Goods purchased for remanufacture into another product by the application of labor. Often material is used in the plural, as materials.

MATERIALS

Goods purchased for remanufacture into another product by the application of labor. Often material is used in the plural, as materials.

MATURITY

The time at which a note or bond becomes due or payable.

MATURITY DATE

The date on which an amount is due and payable; the date on which the principal amount of a debt instrument is due and payable; the date an installment loan must be paid in full. In FACTORING, the average due date of factored receivables at the time cash is remitted to the seller.

MATURITY FACTORING

A method of financing accounts receivable (FACTORING) whereby the FACTOR performs the entire credit and collection function. The factor remits cash to the seller each month based on the average due date of the receivables. The factor’s commission is 0.75 percent to 2 percent depending on the bad debt risk and the handling costs. See FACTORING.

MBO

See MANAGEMENT BY OBJECTIVE.

MECHANIC’S LIEN

A claim against real property made by contractors, suppliers or workers on the property if they are not paid for the work done in construction or repair.

MEDIA

Newspapers, magazines, radio and television used as a means to reach customers by advertising.

MEDIA BUYER

The employee who buys time on radio, television or space in a newspaper or magazine to promote or advertise something. MEDIA KIT A collection of data prepared by an advertising agency or media and used as a sales tool to encourage companies to advertise in their medium.

MEETING

A gathering of several persons for the purpose of discussing a particular subject.

MERCANTILE

Dealing with merchants and trade. Commercial as opposed to personal.

MERCANTILE AGENCY

A firm that supplies businesses with credit ratings on other businesses that are or might become customers. Usually industry or geographically specific, they sometimes collect past due accounts or provide trade collection statistics. The largest such firm is DUN & BRADSTREET.

MERCHANDISE

In business, physical things bought and sold; GOODS; commodities; wares; products. Also, to buy, sell or trade as well as to advertise, promote or organize the sale.

MERCHANDISING

The in-store presentation of goods so the goods will be attractive, convenient and visible to shoppers; sometimes used synonymously with the concept of marketing the goods.

MERCHANT

The person or company that sells goods for a profit; a storekeeper; a shopkeeper; a trader. Most often refers to the retail level but also applies to wholesale.

MERCHANT’S LICENSE

A certificate issued by a local government authorizing the sale of products by a merchant.

MERGER

The uniting or combining of two or more interests into one, such as combining two companies into one company.

MEZZANINE LEVEL

In VENTURE CAPITAL language, the stage of a company’s development just prior to GOING PUBLIC. VENTURE CAPITALISTS entering at this point have a lower risk than previous stages. See VENTURE CAPITAL.

MICROCOMPUTER

See PERSONAL COMPUTER.

MICROECONOMICS

The study of the individual segments of an economy, such as industries, markets or businesses, to understand the behavior of the economy as a whole. Contrasted with MACROECONOMICS.

MICROLOAN

An SBA sponsored program for encouraging lenders to make small loans to small businesses. Loans from a few hundred dollars up to about $50,000 are considered microloans.

MICROLOAN PROGRAM

An SBA sponsored program for encouraging lenders to make small loans to small businesses. Loans from a few hundred dollars up to about $50,000 are considered microloans.

MIDDLEMAN

A term for an intermediary business person that is becoming outdated and replaced by MIDDLEPERSON. See MIDDLEPERSON.

MIDDLEPERSON

An intermediary business person or trader who buys commodities from a producer and resells them to a retailer; a go-between.

MINIMUM BALANCE

The least amount of money that can be left on deposit with a bank, without incurring a service charge.

MINIMUM WAGE

The lowest hourly employee payment permitted by law.

MINOR

Of lesser importance; a trivial matter. Also, a person who has not reached the age of majority (usually considered 18 years of age).

MINORITIES

Plural of MINORITY.

MINORITY

As related to small business, the one who holds less than 50 percent of a transaction, as a minority stockholder or a minority interest in a real estate deal. The opposite of a MAJORITY. Related to social culture as defined by the Department of Labor, a minority is a group of people who have been socially or economically disadvantaged because of race, creed, color or ethnic background. Minorities include Blacks, Asians, Native Americans and Hispanics, but not women.

MINORITY BUSINESS

As defined by the U.S. Small Business Administration, a business in which majority ownership is held by those who are classified as members of minority groups, such as Blacks, Asian Americans and Native Americans.

MINORITY STOCKHOLDER

Any shareholder or group of shareholders that, in aggregate, own less than half the shares in a corporation.

MINUTE

A division of time equal to one-sixtieth of an hour.

MINUTE BOOK

The compilation of the MINUTES of company meetings.

MINUTES

A record of the chronological proceedings of meetings of the Board of Directors, the Executive Committee or other business group.

MISCELLANEOUS EXPENSES

A catchall location for EXPENSES that cannot be specifically categorized on an INCOME STATEMENT.

MISC. EXPENSES

See MISCELLANEOUS EXPENSES.

MODEM

A device that converts the digital signals of a computer into voice-frequency signals to permit transmission of the information by telephone lines; short for MOdulation/DEModulation.

MODIFIED CASH BASIS

An accounting method whereby income is recognized when cash is received and expense items are recognized when cash is paid for them, except for long-term assets that are accounted on an ACCRUAL BASIS. Most small and start-up businesses use the MODIFIED CASH BASIS accounting method. For alternative methods, see CASH BASIS; ACCRUAL BASIS.

MOM AND POP BUSINESS

Generally a small business (most often retail) operated by a husband and wife.

MONEY

In general, the standard medium of exchange as established by a government (i.e., United States) and the standard of value for describing the worth of other things. The media include: coins; paper money and any substance used as money, such as bank notes, checks or money orders. In business, any definite or indefinite sum of money.

MONEY PUT DOWN

See DOWN PAYMENT.

MONOPOLY

Control of production and distribution of a product or service by one company (or several companies acting in concert) and characterized by lack of competition. Outlawed by the ANTITRUST LAWS. See also CARTEL; OLIGOPOLY; PERFECT COMPETITION.

MONOPSONY

Dominance of a market by one buyer or group of buyers acting together. Less prevalent than a MONOPOLY.

MONTH

A time period equal to one-twelfth of a year; 30 days.

MONTHLY

Occurring each month; occurring 12 times each year.

MONTHLY CLOSING

The accounting term for preparation of the financial statement for a month, meaning that no further entries may be made in accounts for that month and the books are closed to additional transactions.

MONTHLY REPORT

A document prepared each month that records events that have occurred during the previous month.

MORTGAGE

A debt instrument by which the borrower (MORTGAGOR) gives the lender (MORTGAGEE) a lien on property as security for the repayment of a loan; most commonly used for real property (real estate). For personal property, the lien is called a SECURITY AGREEMENT, formerly called a chattel mortgage.

MORTGAGEE

The person who holds a MORTGAGE as security for a debt; the one who lends money in a MORTGAGE contract.

MORTGAGE OWNED

A mortgage held; a debt owed to the holder.

MORTGAGE PAYABLE

The amount of a MORTGAGE that remains to be paid as shown on a BALANCE SHEET.

MORTGAGOR

The person who gives a MORTGAGE as security for a debt (LOAN); the one who borrows money in a MORTGAGE contact.

MULTILATERAL

A compact in which three or more parties participate, such as an understanding, agreement or contract.

MULTIMEDIA

Electronic products that use various media (text, graphics, animation and audio) to deliver information. Often these media are also interactive, allowing the user to pick and choose from a variety of information options.

MUNICIPAL ORDINANCE

See ORDINANCES.

MURPHY’S LAW

“Whatever may go wrong, will go wrong.”

 

All definitions were taken from www.small-business-dictionary.org.