Business services are non-tangible products that help companies achieve their goals and needs. They provide support, such as marketing, customer service, human resources, accounting, and other areas that are important for company growth and success. Many of these services are provided by external service providers, rather than internal staff. This can help companies focus on their core mission and save money in the long run. However, there are some risks associated with outsourcing these services. Companies must make sure they select a qualified service provider to minimize the risk of problems.
The business services sector is a large part of the economy and contributes to more than 50% of GDP in many countries. It includes a variety of industries, such as banks, airlines, and software companies. It also encompasses industries that offer non-tangible services, such as waste management, cleaning, and logistics. Companies often outsource their business services because they need specialized expertise that they don’t have in-house. The goal is to reduce costs and improve productivity by focusing on the core activities of the company.
These services are often used by both consumers and businesses, so they’re considered to be a combination of business-to-business and business-to-consumer (B2B and B2C) services. These types of services are typically delivered through contracts or subscriptions. For example, a company may hire an accounting firm to handle its payroll and taxes. Alternatively, a company might subscribe to an online bookkeeping tool for more accurate and efficient data collection.
A service business has a unique set of challenges compared to other sectors of the economy, including low average productivity and legal barriers. Nevertheless, there’s significant untapped potential for this sector. The European Union’s internal market legislation and policy actions seek to remove these obstacles, stimulating competitiveness in this important industry.
Some common examples of business services include:
Insurance services: A service business that offers insurance policies and advice to individuals or businesses. It also provides other related products, such as financial planning and retirement guidance. A financial services firm that provides loan brokering, credit repair and debt collection is considered a business service.
Veterinary and pest control services: These services provide animal and insect control to businesses to keep their environments healthy and safe for their employees and customers. They are also helpful for meeting regulatory requirements and avoiding fines.
Maintenance and repairs: Business services that help companies maintain their properties or equipment. This type of business can include janitorial and housekeeping services, appliance repair and IT support. These companies can help companies resolve issues quickly and stay productive.
Entertainment and leisure: A business service that provides musicians or entertainers for events like weddings, parties or company conferences. This type of business can help companies create a positive image and increase brand awareness.
Utility services: These businesses provide services such as water, electricity and gas to business customers. They are essential for keeping workplaces running smoothly and safely. Companies might also use these services for transporting their products to customers.