Business services are the specialized tasks that a company performs to accomplish its trade activities. They include marketing, human resources, warehousing, shipping, travel and facilities management as well as many other types of support work. These services are a distinct subset of economic services and help companies to add value to their products and to create new combinations of goods and services. Business services are also essential to enabling the service sector of economies to grow rapidly.
While the concept of business services is broad and encompasses many different tasks, most modern business scholars define it as any activity that a firm provides to other firms to assist them in carrying out their trade activities. This can be contrasted with the production of tangible commodities like goods and materials, which is classified as manufacturing.
Unlike physical goods, which can be stored in anticipation of demand, business services are delivered only when they are required. This means that a company cannot stockpile them or sell them on the open market. In addition, the performance of a business service requires the active involvement of a customer or client.
This makes business services a different type of industry than manufacturing, where outputs can be planned and controlled, and even partially pre-produced before delivery. The implication of this is that businesses need to continually adjust their plans and production processes in response to changing market conditions. In addition, a successful business service must provide its customers with value beyond the basic transaction itself. This can be achieved through a combination of features including the ease with which it is delivered, how personalized it is, and its flexibility.
Some of the most popular business to business services are based on consulting and training. These services enable organizations to focus on their strategic-based internal goals by outsourcing the non-core tasks. For example, a business may hire a business services provider to train its employees on best practices and software applications. In this way, the company can free up its own employees’ time to develop highly specialized skills and improve productivity.
Other important business to business services are based on financial and administrative support. These are often performed by a third party and include the evaluation of taxation, depreciation and valuation as well as accounting and finance advice. These support services are crucial for a company to be able to invest in new equipment or expand its operations.
Developing and operating a successful business service business can be challenging. However, with careful planning and a good understanding of the market, entrepreneurs can make this business profitable. The key to success lies in understanding the differences between product and service businesses, and ensuring that all four critical elements of service design are pulling together in the right direction. This will ensure that a business can successfully compete with its peers in the service sector.