A business services company is a type of organization that offers an array of non-product based activities to businesses. These include human resource and administrative functions, such as a recruiting firm or a corporate travel agency, as well as logistical and utility operations, such as a delivery service or an electrical power supply company. Unlike goods, which can be stored for future use or sold at any time, services are intangible and cannot be stockpiled. As a result, they must be produced on demand and delivered to the customer as soon as it is needed. These companies may employ a wide range of staff and use technology to streamline their processes.
A key challenge for any service business is achieving economies of scale. This is especially true for companies that deliver their services to consumers, since they do not have the advantage of selling goods at a fixed price to a large number of buyers. This can often make pricing more complicated, as the value of a service is often subjective and can vary according to the needs and preferences of the individual consumer.
Most modern business theorists distinguish between pure service businesses on one end of a continuum and pure commodity goods businesses on the other end. Most products fall into the middle, with a mix of both service and commodity elements. For example, a restaurant provides a food good, but also a host of service elements, such as ambience and the way in which the meal is served. Similarly, an electric power company delivers electricity to commercial customers but also provides services such as the maintenance and repair of equipment.
Some of the most important services for a business to provide are those related to its employees. These include recruitment, training and career development. Other important employee-related services are health and fitness services, which ensure that workers are able to perform their jobs. Business services can also provide amenities such as in-office day cares, which help employees balance their work and home lives.
Other important business services include financial services, which are needed to manage cash flow, and legal services, which are necessary for establishing, maintaining and enforcing contracts and other business agreements. In addition, information technology (IT) and logistics services are critical for business services companies to operate efficiently. Lastly, marketing and advertising are vital for creating awareness of the business’s offerings. These activities, in turn, can lead to increased sales and profits for the company. This is an area in which many successful service businesses excel. The key is to have all four critical elements of the business model pulling in the same direction. Without this, a business can easily get off track.