Business services are the activities or actions that help businesses but do not always produce a tangible good. They include services such as banking, transportation, warehousing, insurance and communication.
These activities are critical for the operation of a company and require professionals who specialize in those areas. For example, a car repair shop needs an auto mechanic to handle maintenance and repairs. Similarly, a construction firm hires a contractor to handle building renovations and expansions.
Many companies also use business services to outsource tasks that don’t fall within the organization’s expertise or capabilities. For instance, a software company may use a service to install anti-virus protection on computers and phones.
Those who work in these types of jobs need strong interpersonal and communication skills, says Michael Spinelli, CEO of Break Free Academy, a professional development company that trains sales professionals, entrepreneurs, and executives on lead generation and social media marketing. In addition, these roles can be high-stress and demanding, so employees should be able to handle stress well.
They are often paid more than workers in other sectors. In fact, the average salary for a business services job is $45,600 per year, according to CareerCast.
The industry is a major part of the commercial world, and it encompasses a large number of businesses. It also includes services such as advertising, consulting, logistics (including travel and facilities), waste handling, staffing, shipping, and administration.
Some business services are necessary for the operation of a company; others are beneficial in boosting employees’ satisfaction and motivation. Regardless, these services provide value to the customers and are often not perceived as an extravagance or luxury.
It is important to understand how business services differ from physical goods so you can better price them and make them valuable to your customers. This will increase your bottom line and make your company profitable.
Unlike products, which can be stored for future use or sold, service goods are produced on demand and cannot be stored. This reduces the opportunity for developing economies of scale in the production process.
Another difference is that the customer plays a role in the value and cost of a service, as opposed to product pricing, where the only people affecting costs are the employees who produce and deliver them.
For instance, a customer who dithers at a fast-food counter affects the service that everyone behind him gets, which can result in higher costs and less efficient operations.
There are many different types of business services, and most come in two categories: consumer-facing and business-to-business. Most business-to-business services involve transactions between trade organizations such as wholesalers and manufacturers, while consumer-facing services are generally for customers who purchase directly from the manufacturer.
In either case, service businesses are often more difficult to describe than their product-oriented counterparts. This is because service-oriented businesses are more abstract and often do not offer a direct link to the customer.
There are four critical elements to the success of a service business: design, resource management, technology, and organizational culture. When these elements are not aligned, the business is likely to fail.