Business services are a diverse category of industry that include a wide range of business support functions. These services may provide information, advice or experiences and may not produce a tangible product. They are important to most companies and play a key role in the economy, contributing to 11% of EU GDP. Business services are also essential to innovation and productivity, especially in manufacturing.
The success or failure of a service business depends on four critical elements. The challenge of crafting a profitable business is to get these critical elements pulling together rather than apart. These are:
A service is defined as an activity that meets a specific need or want of a customer. Examples of business services are a catering service for a corporate event, a management consulting firm providing advice to a company, or a graphic design firm creating logos and marketing materials for clients. The term can also refer to activities that are a part of a larger whole, such as an airline providing flight tickets for a conference.
Most business services are performed by third-party firms. These firms provide logistics, fulfillment and supply chain management services. For example, they might receive and store goods for a client, sort them into customized lots and fulfill orders, and perform light assembly before shipping the items to customers. They can also perform value-added services such as repackaging, labeling and marking. These services can reduce costs and improve the competitiveness of a firm by making it more efficient to work with suppliers.