Business services are a category of service-based businesses that provide specialized services to businesses, institutions and individuals. They help businesses in a variety of ways, such as marketing, accounting and payroll, facilities management, IT, research, logistics and travel services.
They can also be defined as businesses that focus on the development of customer relationships and the exchange of work for payment. Entrepreneurs in the business services industry enact these relationships through contracts.
These businesses are a key part of the European economy, and they contribute 11% of GDP. They play a central role in the ‘servitisation’ of products and are essential to a number of sectors, including manufacturing.
Often, a company will hire an outside company to perform some of its non-core services. This can be done for a wide range of reasons, but it can also be to save money. For example, if a company needs to purchase an expensive piece of software that the firm does not have the resources or expertise to install, they will use a business services firm to provide this service for a reasonable fee.
Many services are priced on the basis of value rather than on cost. The price is determined by what the customer thinks the service is worth and how much competition there is in the market.
Some services have a brand name that differentiates them from the rest of their competitors. This can help to protect them from the competition, and it can help to attract customers.
However, the brand name in most cases does not matter, and a service company will develop a reputation for its quality of service over time. This is a critical factor in the growth and success of a service company.
The main differences between product and service companies are that in a product-oriented company, the product develops and markets itself to a market. This is a relatively straightforward process, and it has been successful in the past.
In a service-oriented company, the service does not have a brand name and has not developed the same kind of customer loyalty or reputation that a product has. This is an especially important factor in the early stages of a service-oriented company, because it can take years to build a reputation that will be a competitive advantage in the marketplace.
One way to determine the health of a service business is to look at whether the firm gets four things right–the soundness of its offerings, the management of its people, the ability to control costs, and the quality of its products. These four things, along with the overall soundness of its business plan and strategy, can help to determine the future profitability of a service-oriented company.