Business services are a group of intangible activities that benefit businesses without producing tangible goods. They are an essential part of large firms, and the service industry represents a major portion of the commercial world.
Unlike physical products, they cannot be stored for future use. They must be provided to customers at the moment they are needed. They are non-consistent and individualized, with changes in demands and expectations from consumers.
Examples of business services include information technology, procurement, and shipping services. These help companies achieve their goals and increase profitability by aligning their assets with the needs of both customers and employees.
The business services industry is a vital component of the global economy, with growth opportunities arising in emerging markets such as China and India. However, the sector is still facing low average productivity and persisting legal barriers. The European Commission is seeking to address these issues through policy actions that promote growth, innovation, and the competitiveness of the industry.
Cost of business services (cost of sales)
Direct labor costs are the largest expense for most businesses, but materials are often also a significant factor. In addition to a company’s internal employees, many organizations outsource business services to business service professionals, including accountants, financial analysts, and IT specialists.
These business service experts can complete tasks that may not be within a company’s capabilities or expertise, helping to reduce overhead expenses while still meeting a firm’s needs. They can even help to boost employee morale by delivering a more streamlined work experience for employees.
Providing quality customer service is a critical part of any organization. Whether it is providing a fast, courteous checkout process or a smooth-flowing teleconference call, the right service can improve the experience of both the consumer and the business.
When a company has a new product to launch, it usually requires a team of people with expertise in the industry to develop and deliver that product. Rather than hiring those individuals in-house, the company can rely on business services to provide this service to ensure the product is ready when it is needed.
Logistics services are an important part of the supply chain, ensuring that goods arrive at their destination safely and on time. Some of these services are used to ship products directly from the manufacturer to the buyer, while others focus on coordinating and optimizing the entire supply chain.
Construction services are a common business service for organizations who want to renovate or expand their buildings. These services often use professional or experienced construction crews to ensure a smooth build process. In addition, these workers bring their own tools and equipment, reducing the cost of supplies for the building.
Insurance services are another popular type of business service. They often help businesses save money on their insurance premiums, as well as reducing the risks associated with employee injury and property damage.
A business can also rely on these services to help with the delivery of essential supplies, such as paper or paint. A delivery service can deliver supplies to a company’s offices and retail locations, eliminating the need for employees to travel to the warehouse or supplier’s location to receive supplies.