Business services are the actions or activities that a company does for itself without supplying a tangible good. They include a wide range of industry sectors and are a large part of the business world.
A company that outsources the construction of a new warehouse or renovation of an existing workspace to a contractor is engaging in business services. That company can then focus on other strategic-based goals while leveraging the expertise of a skilled workforce and the use of appropriate tools.
The same is true for the use of a business services provider to handle an accounting task like preparing tax returns. Companies can also outsource the design of a product or a marketing campaign to a firm that specializes in that activity.
Most modern business theorists see a continuum with pure service on one end and a pure commodity good on the other. Almost all products fall somewhere in between. A restaurant provides a service in the form of food but also offers a commodity good (the table, the chairs, the ambience). The same is true for utilities that provide a physical good (water) but also offer a service in the form of delivery and customer interaction.
A successful service business requires a different mindset than a product business. The core of that difference lies in the fact that a service business can’t last long if it doesn’t effectively meet the needs and wants of attractive customers. To do that, managers must undergo a shift in perspective. They must move from thinking about what characteristics to include in a product to how those characteristics might impact the experience that a customer will have.