Business Services
Business services refer to a broad class of businesses that do not produce a tangible product but rather provide an intangible service. Such companies are found in every industry and include consulting firms, information technology service providers, accounting services, waste management, transportation and shipping services and even staffing firms. They are an essential part of the economy as they help to support other businesses and consumers by providing goods and services that these businesses cannot produce on their own.
A service business sells its services to other businesses or consumers for a fee. In the case of businesses, the fees are often based on a set rate or hourly basis and can range from minimal to substantial. They often require the use of a third-party provider to provide the service due to a lack of in-house expertise, training and resources. A good example of a business service is a consulting firm that provides strategic planning or marketing advice to other businesses.
There are two main categories of business services: Business-to-business (B2B) and business-to-consumer (B2C). Most B2B service businesses help other companies perform an activity that they can’t do themselves due to a lack of in-house experience, training or resources. A common example of a B2B service is a shipping company that provides value-added warehousing services to manufacturers. This includes sorting bulk goods into customized lots, packaging, labeling and performing light assembly, which makes the process more efficient for both the manufacturer and its customers.
Business-to-consumer services typically serve a specific market segment and are provided at a retail location or over the Internet. These can be as simple as a pet-sitting or dog-walking service or more complex such as IT services, management consulting and financial services. They often require a high level of customer interaction and rely on repeat or referral business to sustain the venture.
Creating a profitable business service requires managers to understand and appreciate the differences between product businesses and service businesses and the critical elements of designing a successful service. The key is to design an offering that effectively meets the needs and desires of a desirable group of customers. To succeed, a service business must offer an attractive price and convenient access.
The most popular types of business services are those that help other businesses to operate efficiently and effectively, such as a human resources shared service or finance shared service. Such services often reduce costs and improve performance by reducing duplication of effort, automating processes and centralizing data analysis.
Other important business services include IT infrastructure management, which aligns IT assets with the needs of the organization and supports business goals. For instance, it helps to ensure that the right amount of hardware and software is installed and maintained. It also helps to provide employees with tools for self-service, which increases productivity and reduces IT costs. Other essential business services include the provision of office space, telecommunications, utility services and transportation and waste management services.