Business services are activities that help a business but do not create a physical commodity. The industry encompasses a broad range of sectors, from transportation and food services to information technology and consulting. These companies provide intangible support functions, such as marketing and human resources management. They also help companies perform routine operations, such as accounting and warehousing. Many of these companies offer consulting, software, and other technology services that help their clients manage and improve their own businesses.
While a product-based company’s success depends on how well it creates and markets its products, a service-based company can thrive or fail by how well it manages the complexities of running a customer-oriented business. These complexities include the need to understand customer needs, create value for customers and differentiate their offerings from competitors’. Managing these complexities requires a fundamental shift in perspective. Managers need to move away from thinking about the characteristics that buyers will value in a product and focus instead on how they can deliver valuable experiences that customers will want to keep buying.
Unlike goods, which can be stored for later use, services cannot be stocked. They must be delivered right when the customer requests them. This difference is one of the primary differences between business services and goods industries. It is also a key reason why service-based companies are able to scale more quickly than goods-based companies.
The types of services offered by a business vary widely, but most are designed to meet the needs of a particular type of client or customer. This can be as simple as a delivery service for office supplies, or as complex as an event planning firm that caters to the needs of corporate executives.
While some of these services are provided by employees within a company, others are outsourced to external providers. These providers can offer specialized expertise or equipment that the company does not have, such as a courier service that provides time-critical delivery of documents or an IT consultant who can enhance security features in software programs. Other specialized services include financial services, which cover a wide range of activities such as taxation, valuation, and expansion. These are typically provided by a finance department or by financial advisors.
Some of these services are used by a single company, while others are utilized by groups of related companies, such as a group of law firms or banks. Another important class of business services is those that are used by the government to fulfill its public duties. For example, a federal agency might provide passports, social security cards and driver’s licenses. Other government agencies might provide education, health, and housing services. The type of business services a government offers can affect its economic growth, as well as the quality of life for its citizens.