Business services refer to various tasks and activities that support a business, but do not produce or deliver any tangible goods. Examples include information technology services, which assist numerous other business services like procurement and finance; warehousing, which stores raw materials, finished goods and inventory; and communication services, which facilitate communications between businesses. Almost every business in operation requires these types of services to be successful.
The vast majority of the world’s economies operate in service industries. The largest service sectors include those involved in banking, telecommunications and insurance. In terms of revenue, these sectors account for 11% of the European Union’s gross domestic product. Another significant group of service industries is professional and business services. As its name indicates, this sector includes a broad range of professional services such as accounting and tax preparation, consulting and marketing.
Many companies use business services to save time and money. These providers offer a wide array of business-to-business (B2B) offerings such as marketing, consultation, logistics and waste management. Essentially, these businesses help other companies manage their operations and reach new markets.
These services can also improve company productivity by freeing up in-house employees to focus on more important projects. Additionally, many business service providers offer specialized expertise that isn’t available in-house. Moreover, many of these providers offer flexibility and can scale up or down their services as needed, which is particularly beneficial for businesses that experience seasonal output fluctuations.
Companies also use business services to reduce the risk of failure. For example, a company may engage a business consulting firm to help develop a strategic plan or to identify potential risks that could impact the company’s profitability. Other companies might hire a business training or evalutation firm to train their employees in a particular area.
Despite the fact that these businesses provide valuable and necessary services to their customers, they are typically more difficult to market than products. This is mainly due to the lack of a concrete product that can be displayed or demonstrated during a sales presentation. Consequently, these businesses must adopt different strategies when selling their services to prospective clients.
The primary client base of a service business is usually one of two categories; either individual consumers or other businesses/organizations. For instance, a carpet cleaning company would not spend much effort advertising their services to residential customers, but rather to commercial establishments, as this is where the bulk of their customer base will be found. Similarly, a security services company will most likely not advertise their services to individuals, but instead to businesses that require the safety and protection of their property and staff. The exception to this is financial services, which often serve both consumer and business market segments. This is especially true in the case of business loans and credit lines, which are often used to fund expansions or purchase new equipment. In these cases, the lenders are usually banks or other financial institutions. However, there are also many private business loan brokers who can provide these types of loans to small businesses.