Business services are various tasks and activities that help maintain a business despite not resulting in a physical product. They include banking, warehousing, marketing and inter- and intra-departmental communication. While they may be offered by a company itself, many are outsourced to third-party providers. This allows a company to focus on its core goals while leaving noncore functions to experts.
A common type of business service is a software service that enhances features and upgrades security for a company’s technological devices, such as computers and mobile phones. Other types of business services include transportation services that get goods and materials to a work site, day care or office building, and utility service businesses that supply water, electricity or gas to a workplace.
Unlike goods, which can be stored for future use or sold to other buyers, services must be delivered when demanded. This is one of the most significant differences between goods and services. Other characteristics of business services include intangibility and inseparability.
To succeed, a business services firm must provide the specific needs and wants of an attractive group of customers and offer competitive advantages in terms of price, quality and convenience. To do so, the firm must have a clear understanding of its customers, which requires learning as much as possible about their lifestyles and purchasing habits. This information can be gleaned through market research, interviews and surveys.
The emergence of the internet has made it easier to connect with potential customers worldwide. However, it is still crucial for a business to understand local market trends and requirements to attract the right clientele. This means determining whether the local area is ready for a particular service, such as cleaning, or whether the competition already offers that service and has established a customer base.
A good business services strategy must also include identifying the right type of marketing tools to use, such as direct mail, email newsletters and online advertising. It is also important to consider local taxes when developing a business, since some states require businesses to charge sales tax on their services.
While a business services industry is still relatively new, it has been growing rapidly. As countries develop, their businesses need a range of services to operate efficiently. These services include banking, insurance, warehousing, marketing and transportation. For example, a company that manufactures electronics might need warehousing services to store raw materials and finished products; transportation services to ship its goods to markets; and marketing services to promote itself.
Sharing services helps businesses reduce costs and improve performance by centralizing certain functions. For example, by combining human resources functions into a single department, companies can reduce the cost of hiring, training and payroll processing. Other shared business services include accounting, finance and IT operations.
