Business services refer to any work performed by a company that does not result in a physical product. They include a broad range of activities, from enhancing the security of a company’s technological devices to providing translation services. These activities enhance the value of a company’s products and enable them to reach new markets and consumers.
Many of these services are outsourced to external service providers. This allows a company to focus on its core competencies while also reducing overhead costs. Using outside resources can be more cost-effective than paying employees to perform the same tasks. In addition, service providers often have specialized expertise and experience that is hard for a company to replicate internally.
For example, a company may outsource its warehousing and distribution activities to a third-party service provider. These companies can improve overall efficiency by coordinating and streamlining the transportation, packaging, labeling, order processing and fulfillment functions. Similarly, a firm may use a contractor to perform a construction project instead of its internal staff.
Another type of business service is known as a “business-to-business” service (B2B). This form of service takes place between trade organizations and focuses on reducing costs and improving productivity. For example, a car manufacturing company might conduct B2B transactions with a wholesaler to purchase tires and rubber hoses.
Developing a successful business service requires knowledge of marketing, finance and more. To begin, it is important to understand the inherent cost of providing a service and how that factors into pricing your services.