Business services are activities that provide benefit to businesses without delivering tangible goods. They make up a large portion of the commercial world and include everything from marketing to supply chains. These profitable businesses require little investment and allow entrepreneurs to specialize in a specific niche, making them great options for startups and freelance work.
To succeed, service businesses must do two things: have a product to sell and attract customers willing to pay for it. As a result, the success or failure of a service company can come down to four basic elements that managers must get right:
Customers Value Experience
In contrast to product design, which typically focuses on product characteristics customers will value, management of a service business requires a change in perspective. A successful service design focuses not on product characteristics but on the experiences they create. This includes customer support, which must be available and effective for customers to consider a company’s services.
Moreover, to create the desired experience, managers must develop the capability of their personnel. This requires hiring talent with the right mix of skills and training them to deliver the appropriate level of performance. This must be done while also enabling a flexible, adaptable organization that can meet the demands of customers and the ever-changing business environment.
Another common strategy is to consolidate support functions into shared services, which operate as a “business within a business.” These operations are centrally managed and focus on cost reduction and improved service delivery through standardization and automation. Examples of business services that can be consolidated into shared service units include human resources, finance and accounting, information technology and supply chain management.
These services are not typically viewed as revenue drivers, but they are essential to business effectiveness. Consequently, the performance of shared services often depends on strong leadership from senior managers. Without this, revenue-generating line managers may overrule shared services leaders, which can undermine the performance of the unit.
There are many different types of profitable business services that can be offered, but the most important thing is that a small-business owner understands their unique selling point and how to effectively market that to potential clients. Whether it is providing financial planning or helping to grow a brand, these profitable businesses have a lot of potential to generate revenue and help companies thrive.