There are three types of business models. One sells physical (tangible) goods, the second sells services (intangible) goods, and the third combines services and physical goods. Depending on the skills, capital, and resources, a business pursues any of the three models.
Service in business can be described as an activity or a task performed to benefit customers (B2C) or other companies (B2B) without a physical product. There are different types of services, for example, education, consultation, support, legal, repair, healthcare, utilities, business, real estate, and hospitality.
A service business is versatile. Therefore, it can be run in teams, in a lavish office setup, or solo from the comfort of an RV. All you need is an in-depth knowledge of the subject matter and a valuable skill.
In the text to follow, you will be able to learn about services in business, their types, and common examples. Without further ado, let’s dive in.
What is Service in a Business?
Service in a business is an act of support or performing an activity for a customer or company in exchange for a fee. This service can range from educating kids at school to a remote marketing firm that provides consulting advice on running ad campaigns.
It’s important to understand that services are an essential nonphysical part of the economy. Therefore, businesses from the government and the privet sectors hire people in the service industry to support their operations to improve the quality of their products, human resources, and environment.
For example, a company may need a trainer to educate their staff, a writer to write user manuals for electronic products, and a cleaning service provider to keep the offices germ-free.
All economies worldwide are service-based. They act as social welfare providers for the citizens. That’s how important is the service business. Companies or individuals cannot do everything on their own; they need service providers to help their businesses run smoothly.
Characteristics of Business Services
To understand the service business better, you should know its characteristics. Here are the five elements mentioned below
- Intangibility. Services are intangible. They cannot be touched but only experienced. For example, a mental health counselor’s advice/therapy is a service. You cannot touch it, but it positively affects your mental health.
- Inconsistency. Services are inconsistent and need modification according to the client’s preferences. For example, the number of edits a graphic designer makes to the logo might vary according to a personalized customer package.
- Inseparability. Services are consumed as soon as they are created. For example, if a company launches its business consultation program, it can be sold the moment it’s advertised.
- Inventory. Services cannot be stored as inventory and are not in a physical form. You cannot save them for the future; they are provided as soon as the demand appears. For example, you can store food but not the taste.
- Involvement. Services require the active involvement of the client. Therefore, until the client is satisfied, the service provider continues to provide the service. For example, the doctor continues the treatment until the patient’s health improves.
Types of Services for Business with Examples
Businesses require different types of services. Some have a long tenure, while others are project-based, depending on what areas the business plans to expand. The service providers can be companies or individuals, depending on businesses’ preferences and resources.
Below are the types of services for business with examples for clarity
Consulting is business advice the company needs in case of expansion, budgeting, strategy building, project management, etc. Consultation can be limited to any one or multiple areas of the organization, such as marketing, human resources, operations, etc., or at the strategic level of the business. Consultants work directly with business owners.
Example. The company hires a business consultant to analyze its marketing department to identify unnecessary expenses and cut costs. The consultant will devise a solution to lower and manage the cost and provide a new budgeting method to avoid additional fees in the future.
Marketing & Design
Despite having a marketing department, companies still need additional help with their advertisements, online campaigns, and web and logo design. Marketing service providers have
- Resources to conduct customer research
- Competition analyzing tools,
- Knowledge of new marketing trends
Example. A company hires a marketing consultant to devise a plan to engage its online community for a new product launch. The marketer will work with the teams to produce meaningful content, design posts, and strategize promotions.
Unlike the company itself, external training companies have the right expertise to train employees. Training providers do team activities, group and 1:1 coaching to the employees, workshops, and team presentations. Training also helps employees with skill building and a growth mindset which is valuable to the business.
Example. The company feels that its employees need to gain teamwork skills. They hire a human resource trainer to address the issue. Next, the trainer develops workshops and group activities to help the employees connect with others and work collaboratively.
Companies hire external counselors for the psychological well-being of their employees, especially for employees who work under pressure for long hours. The counseling service is a great way to help the employees work on their mental health individually or in teams. This service enables the company to establish a healthy work culture and promote open communication.
Example. A company hires a counselor to spread awareness of mental health issues, symptoms, and how to request support.
Despite having a finance department, companies may hire a financial adviser to come on board and help them with asset portfolio management, budgeting, cost reduction, financial plans, and avoiding heavy taxation. Financial advisers work closely with the finance department and the company owners for a 360-degree overview.
Example. A company feels that its administrative expenses need to be put in order. They hire financial services for the annual budgeting of administrative costs.
Companies hire external software developers and managers to get customized software solutions for the company. Depending on the nature of the business, the software provider will develop programs to manage and protect data. Software providers are also hired if a computer-system-related malfunction repeatedly occurs and is beyond the internal expertise of the company.
Example. A company regularly experiences system crashes and technical malfunctioning of the system. They hire a team of software developers for a sustainable solution and smooth software running.
It’s convenient for the company to outsource the cleaning and maintenance services rather than managing the janitorial staff internally. The cleaning services ensure that offices are professionally cleaned regularly, maintaining health and safety standards.
Example. Cleaning services are hired to keep the dust off all the equipment and water the plants daily.
The business might request waste management services to dispose of waste safely and avoid the leakage of harmful production fumes into the environment. The waste management company comes up with a plan to keep the campuses clean and use recyclable waste.
Example. The waste management company is hired to efficiently dispose of the waste every day according to eco-friendly standards.
Companies that require employees to travel regularly might need cost-effective traveling solutions. Travel services are responsible for scheduling flights, arranging tickets, and car rental services.
Example. The company hires car rental services for the employees to travel daily for a few hours to the production plant.
Companies regularly arrange formal and informal corporate events. The event management team ensures all event and catering supplies are available on time. Event management providers look after the guests and ensure that the event is successful for the business.
The company may hire an event management team to arrange a fundraising event for a charity.
Companies also hire security providers to avoid physical threats on office campuses, events and the safekeeping of valuables. Security officials ensure that company information, employees, guests, and managers are safe from physical threats. Moreover, online data, money, or other valuables are moved under high-security protocols.
Example. A company wants security services to protect its research and development department from intruders.
Legal services are usually hired externally to avoid disputes and manage the business’s legal documents. To prevent legal liabilities, the company likes to take advice on legal matters and move forward accordingly.
Example. A company hires legal services to resolve a dispute between employees or lawsuits against external parties.
Service businesses are one of the most integral components of the business world and economy. They not only generate revenue and create job opportunities but give necessary support to other businesses, originations, and governments.
Let us know in the comments if we missed something.