Business services are the various activities that benefit businesses but don’t result in a tangible product. It is an industry that comprises a large portion of the commercial world, especially for larger firms. They are required for marketing, production, cost and convenience reasons as they provide a wide range of advantages that products cannot. They are a must for any trade to survive, hence are quite a vital part of the economy.
These types of businesses are different from retail or wholesale firms, as they are not primarily concerned with selling goods and commodities. Business-to-business (B2B) services include those that help other companies with the development of their operations and productivity, while business-to-consumer, or B2C, services are aimed at directly helping customers achieve a specific goal, whether it be improving the quality of life or making their workplace more efficient.
Services are intangible, and their worth is based on the fact that they can only be practiced, rather than stored. They are also not consistent, as they have to be delivered each time. For example, a customer who dithers while waiting for a service at a fast-food counter can negatively affect the efficiency of the service for everyone else behind him.
Unlike goods, which are stocked and sold whenever they are needed, businesses must hire a workforce to produce their own services. This can be costly, as it entails the need to pay for salaries, insurance and training. In addition, the business service provider may not have all of the necessary tools or equipment in-house. In such cases, outsourcing is a more viable option as it can reduce costs and increase flexibility.