Business services are activities that benefit companies without delivering a physical product. These include marketing, consultation, logistics (including travel and facilities services), waste handling, staffing services, shipping, and administration. Almost all businesses require at least one type of business service to operate effectively. This article explains what business services are, why companies use them, and how to create a successful business services department.
Unlike tangible goods, which can be stored for future use, services must be delivered immediately when demanded. This is one of the key differences between service and goods. The other main difference is that customers can often be involved in service delivery processes, to a greater or lesser extent. For example, a customer who dithers at a fast food counter can make the service slower for everyone behind him.
Companies hire business service providers to reduce overhead costs and focus on core competencies. This is especially true in highly competitive industries where a firm can easily lose market share to rivals that offer similar products or services at a lower cost. In addition, firms rely on business services to improve the productivity of their employees.
The business service industry is a large and diverse sector of the economy. This industry includes professional and technical services, administrative services, information technology, and specialized manufacturing. Combined, these sectors employ more than 20 million people in the United States. In terms of revenue, this industry represents nearly a fifth of total U.S. gross domestic product (GDP).
Most companies need at least some business services to function efficiently. For example, most companies have a need for warehousing and distribution services to manage inventory and expedite the flow of materials from supplier to manufacturer to retailer to consumer.
Another important business service is financial services, which include banking and investment. These are used to fund projects, purchase equipment and other operational expenses. Many businesses also need to pay their utility bills, which are another common business expense.
Providing business services requires a high level of interpersonal skills. Service professionals must be able to listen carefully to their customers’ needs and respond appropriately. They must also be able to problem solve and think outside the box. For example, if an employee encounters a customer who is dissatisfied with the quality of a company’s service, the employee must be able to resolve the issue quickly and satisfactorily.
The demand for business services is growing worldwide as economies develop and mature. The European Union (EU) is working to eliminate barriers to trade in this sector, which could increase global competitiveness and improve efficiency by lowering prices and increasing cross-border flows of service workers. This will help businesses provide better services to customers while reducing their overall operating costs. These efforts are helping to promote growth and development in the business services sector, which is projected to grow faster than the overall economy over the next decade. In addition, the growing number of freelance workers is adding to the demand for business services.