What Does the “scope” of a Business Mean?

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The scope of any business involves every activity performed by that business including sales, services, product developments, marketing and contracts. Basically, business scope refers to all daily operations of the business, particularly those activities required to secure revenue.

The scope of a business usually covers several departments and covers a lot of different areas, depending on the company. For example, many corporations own several businesses and companies, meaning the corporation’s business scope is quite large and potentially covers multiple products and markets. Smaller businesses, such as family-owned stores, have a smaller business scope as they are focused primarily on acquiring goods wholesale and selling those goods on to consumers at retail prices.

When starting a business, it is important to understand its scope of operation to write a proper business plan. For the sake of profits, most businesses engage in activities or focus on products and services that maximize their income. For example, a company that sells parts for appliances but does not offer servicing since doing both might spread its workforce too thin or negatively affect its profit margin. On the other hand, a business might decide to expand its scope to include services or products when it identifies a demand for such.