A business service is a business that provides intangible value to another business rather than offering a tangible product or commodity. This is the most common type of business and can be seen in companies such as banks, airlines, software companies, waste management services, and cleaning or catering companies. These businesses usually hire a larger percentage of their workforce than manufacturing or trade businesses and are a significant part of most countries’ economy. These services are now provided not just in physical locations but also over the internet via web-based platforms and mobile apps.
Unlike products which can be branded and have a name recognition in the market place, very few services develop such a brand identification, but instead depend on developing a reputation for their quality. This often creates a barrier to entry for new players as the more complex and abstract the service, the more it is difficult to develop a reputation for.
Businesses are required to use a wide range of business services in order to carry out their operations. These services include banking and finance, warehousing, transport and logistics, insurance and communications. These services are important to the economy because they enable businesses to access funds; insure their plant, machinery, goods and finished products; move raw materials, work-in-process and inventory; and communicate with their customers.
A good business service provider can help a company improve its overall efficiency by outsourcing non-core activities and freeing up internal resources. They may also be able to offer a more cost-effective solution than in-house resources and can provide additional expertise or experience that would be unavailable internally. They may also be able to scale up or down their service provision in response to fluctuations in demand.
In addition, a good business service provider can help a company reduce its risk by providing professional advice and support for key areas such as regulatory compliance, human resource management, and technology infrastructure. They can also provide strategic support for the development of a company’s vision, mission and values.
Choosing the right service provider for your company is a crucial decision that should not be taken lightly. After all, the service provider you choose will have an enormous impact on your company’s efficiency and profitability. Moreover, the wrong service provider can negatively affect your customer satisfaction and lead to a number of other issues.
There are six essential questions to ask yourself when choosing a service provider:
The professional and business services supersector group includes businesses that provide specialized and professional advice, technical or management assistance, or information. This sector does not sell a physical or concrete product, although it may sometimes involve the transfer of ownership of intellectual property. Examples of pure service businesses include airlines, computer service bureaus, law firms and management consulting firms. The industry is typically highly competitive, with many different providers operating in the same field. As a result, top managers in this sector must have excellent strategic management skills.