What Are Business Services?

Business services are a diverse collection of tasks and activities that help maintain a company’s operations, but do not produce any tangible product. This includes everything from information technology, which supports numerous other business services like procurement and shipping, to employment services, which manage a company’s workforce. Companies often use business services providers to fill gaps in expertise, capacity or scale, and as a way to reduce operating costs.

As the economy becomes increasingly service-based, businesses need more and more support to function. The service sector contributes a large percentage of GDP in many countries, and it is vital for both economic growth and competitiveness. It also provides a number of jobs, particularly in high-income economies.

One type of business service is business-to-business (B2B) support, which involves transactions between trade organizations. For example, a car manufacturing company performs B2B services when it buys tires, rubber hoses and other materials from a wholesaler. Other examples of business-to-business services include freight shipping and warehousing.

Another type of business service is business-to-consumer support, which involves the provision of support to end consumers rather than trading organizations. For instance, a notary public or hair salon may provide B2C business services to individuals. Other examples of consumer-facing business services include utilities, banking and insurance.

A third type of business service is financial services, which involve the provision of credit and capital to enterprises and individuals. For example, a bank may lend money to a new business or to a small-business owner who wants to expand an existing business. Financial services also include asset management, which helps companies keep track of the value of their investments and assets.

Other types of business services are consulting, training and facility management. Consulting firms can offer advice on strategic planning, human resources development and other issues. They can also provide training to employees or customers on topics such as customer service, sales and marketing. Facility management firms can take care of a company’s physical infrastructure, including office buildings, parking lots and other facilities.

While there are many different kinds of business services, all have four critical elements in common. These are customer needs, capabilities and motivations; the environment in which the service is offered; and the organizational structure that supports and enables the delivery of the service. When a business gets these elements right, it can thrive; when they are wrong, the business will struggle to survive. The success of a service business is dependent on the ability of managers to get these elements pulling together in a cohesive and effective manner. This is why a service business model approach to management has become an important teaching tool in business schools around the world.