Business services are non-financial activities that help to keep a business running. They include a wide variety of services from accounting to computer support and training.
The word “business” comes from the Latin term bono meaning “good” or “service.” A business is an activity that produces or sells a product to make profit. A business owner may be a sole proprietor, partnership, corporation or limited liability company.
Businesses produce a wide range of products and services that serve to meet the needs of consumers. These goods and services fall between the two extremes of pure service (in which they only deliver an experience to the consumer) and pure commodity good (in which they deliver physical goods).
Intangibility: One of the most important differences between goods and services is that goods are tangible and can be stored for future use. With services, on the other hand, it is difficult to store them for future use. This means that services have to be delivered when a customer requests them and they must be consistent, exclusive and involve the consumer in some way.
Consistency: With goods, each time a consumer buys a certain product, he expects the same quality and level of service. With services, each time a customer hires a certain service, the provider must change the service accordingly.
Inseparability: With goods, production and consumption are in parallel. With services, both demand and supply are in parallel.
There is a growing emphasis on the development of service systems to provide value for customers and act as both service providers and service consumers. This is an important aspect of management practice and can be challenging for managers. It also requires a fundamentally different approach to business planning and operations than that used in product business operations. The key to success is to develop a working plan that incorporates all four of the critical elements of service design — inventory, intangibility, consistency and inseparability.