Business services, also known as intangible products, are value-added, non-financial, business activities that serve a company and its customers. They are important to most businesses, and a major part of the global economy.
A service is an intangible good that is produced and delivered to a customer when it is demanded. A product, by contrast, is a tangible, perishable commodity that can be stored for future use.
Unlike goods, which are usually distributed over a broad geographic area, service production and consumption are generally concentrated in a few locations. Consequently, the need to build economies of scale in this industry is limited.
The service business model:
A successful service company must create a working plan that incorporates all four critical elements of the service design: (i) business, (ii) technology, (iii) people, and (iv) processes. These elements are often difficult to spot and separate, but they must work together or the business will fail.
The service industry consists of many distinct types, all of which provide non-financial services to other businesses. They include advertising, marketing, consultation, logistics (including travel and facilities), waste handling, staffing services, shipping, administration, and security services, among others.
There are three main types of service businesses: business-to-business, social, and business-to-consumer. They differ in how they are funded and in their approach to management. The business-to-business category offers services to other businesses for a flat or hourly rate; the social category provides services to society at large; and the business-to-consumer category provides services to consumers on a more direct basis.