Business services are activities that benefit businesses without producing or delivering physical products. They are a major part of the economy and include such diverse sectors as information technology, telecommunications, travel, financial services, health care, logistics and transportation, management consulting, training, legal and security services.
Service businesses often have difficulty describing their businesses, because they are more abstract than product-oriented businesses. For example, a management consultant might not be able to describe what it does to an outsider who has never engaged in a consulting relationship.
The distinction between service and product is a critical one. In product businesses, the physical reality of the product provides a clear base on which to build an effective business description.
Similarly, in a service business, the abstract nature of the service means that the service provider often has to make decisions about what services they will provide. That decision may be driven by cost, value, or a combination of the two.
As with all businesses, there are advantages and disadvantages to running a business that offers services. For instance, in times of economic stress, consumers tend to cut back on services.
However, in good times, a company can gain new customers by making their services more valuable and appealing to existing ones. This strategy can lead to better profit margins and a larger market share.
In this way, business services can be a good career choice for people who enjoy customer service and want to have more control over their own work schedule. They also offer opportunities for advancement and job security, Wilson says.
