Business services are activities that benefit a company but do not produce any tangible product. They support a company’s operations, including marketing, production, safety and cost. These services can include information technology, procurement, shipping and finance, among others. The work can be performed at the company’s headquarters, retail location or remotely from a home office. Generally, the work is high-stress and fast-paced, and it is important that workers have strong interpersonal skills to collaborate with other employees and customers.
Companies use many different types of business services, from cleaning to childcare. For example, a company may hire an in-office day care provider to help its employees maintain work-life balance and to save the employer time and money by not having to shop for childcare options. Other business services might include animal or pest control, maintenance and utilities.
In general, companies offer these services to their customers, who pay for them, as well as to other businesses. The services help a company increase profitability and productivity, and improve its competitive advantage. For this reason, companies are increasingly focusing on developing innovative business service models to compete with product businesses and other industry players.
For example, a warehousing and distribution service can create value by sorting bulk products into customized lots, packaging goods, controlling inventory, labeling and performing light assembly before shipping the finished product to its customer. In this way, the warehousing and distribution business can act as a middleman to make it easier for a manufacturer and its customers to communicate and work together.
Another type of business services focuses on consulting. This involves the provision of advice or guidance to other businesses, based on expertise and experience. In this role, consultants must be able to understand the unique challenges that their clients face, as well as how those challenges can be addressed effectively. For this type of business services, a consulting firm must develop strong relationships with its clients and have an in-depth understanding of the clients’ industries, according to globalEDGE.
The success of a service business depends on the ability to deliver a quality service in an efficient and cost-effective manner. This is difficult because, unlike product businesses, where the quality of a company’s products or services can be measured, service business quality cannot. As such, managers of service businesses must adopt a new tool kit to manage the complexities of these enterprises. The four critical elements of successful service business models are: design, communication, culture and leadership.