Business services are activities that provide value for businesses but do not produce a tangible product. They include consulting, marketing and other non-production work, such as waste handling, shipping, staffing and administration. Entrepreneurs looking to start a service-based business need a few things: a product, customers willing to pay for it and the right infrastructure to deliver the services. The three major categories of business services are: business-to-business, business-to-consumer and social services.
Business-to-business, or B2B, services help other companies for a flat fee or an hourly rate. These services assist other companies with operating their businesses, reducing costs or increasing output. Services can be provided in person at a client’s location, over the phone or online.
Most of the services that fall under the business-to-business category are professional and administrative in nature. These include advertising, consulting and marketing. They also include accounting, payroll and insurance. Companies may choose to outsource some of these business services to free up time and money, or they might hire their own employees to handle them in-house.
Other types of business-to-business services are technical in nature. These include software services, which enhance features and improve security for a company’s technological devices, such as computers and mobile phones. They can also include maintenance services, which keep equipment running smoothly and address any issues quickly. Companies often use maintenance services to address issues that require specialized expertise or equipment, such as animal control or pest extermination.
In a service-based environment, the most important factor in ensuring customer satisfaction is not physical but rather mental. In a fast-food restaurant, for example, a customer who dithers at the counter slows down service for everyone behind him. Similarly, an architectural firm’s customer whose project plans are difficult to understand negatively affects the quality of the finished building.
The biggest challenge for managers in a service-based business is balancing the competitive autonomy of individual service models with their collective contribution to corporate value. To make this work, they must have a clear vision of what success looks like and how it will be measured. They must also be able to communicate this clearly to their teams. If this is not done, revenue-generating line managers will overrule shared services management and undermine the overall performance of the system. Fortunately, much of the same tool kit that has proven effective in the context of product businesses can be applied to this new type of business. Using a number of key strategies, including hiring the right people and tracking business and consumer data, can help ensure the long-term health of a service-based company.