Business services are a broad category of non-financial services offered by businesses. They can be anything from advertising and marketing to warehousing, travel, waste disposal, employee services, security and administration. They are also called business-to-business (B2B) services.
Definition of Business Services:
A business is a company that provides goods and services to make profit, either by producing them themselves or selling them to others. A business can be a sole proprietorship or a corporation.
The most common type of business is a for-profit, or profit-making, entity. Most of the time, these are owned and operated by a single person or a small group of people. A company can be organized to provide more than one service, but it is usually more efficient and profitable for a single entity to have separate departments for each service.
Another type of business is a not-for-profit organization that provides services to the public. Not-for-profit organizations can be charities, religious groups or social clubs that offer a variety of services for the public.
In the EU, the sector is a relatively untapped growth opportunity, despite persistent legal barriers to entry into the internal market and low average productivity. The EU has been promoting a number of measures that aim at stimulating competitiveness in the sector.
Among the many initiatives, the European Commission has set up a High Level Group on Business Services to assess the untapped potential of this sector and to contribute to policy development. This group will also work on enhancing the visibility of the sector in Europe and to promote its role as an important driver of economic growth.
Key Characteristics of Business Services:
There are four main characteristics that distinguish business services from other sectors: inventory, intangibility, inconsistency and inseparability. For example, a service cannot be stored for future use; it must be delivered when it is needed and exclusively done each time.
Service companies must have a clear understanding of the needs and requirements of their customers and how to satisfy them. They must also have the ability to communicate effectively with their customers and to be flexible enough to adapt to changing conditions.
They must be able to deliver on-time and in-full, and they must provide a consistently high level of customer service. These are the fundamental pillars of their business strategy, and the success of a service company often depends on how well they fulfill these criteria.
It is important for a business to have the financial wherewithal to deliver its services and keep them in the black. It is also necessary to have the right personnel in place.
The service industry is a growing sector in the economy, providing jobs and revenue for thousands of small and medium-sized businesses around the world. It is primarily driven by the globalization of trade and finance, technological advances and new communication technologies and infrastructures.
The business services industry has room for exponential growth. The demand for these services is rising globally as consumers seek out more personalized experiences, especially when it comes to health and wellness, as well as social interactions. These services are also increasingly scalable, so that businesses can add or drop them as the economy and their customers change.