Business services are various tasks and activities that help maintain a business, but do not result in the production of tangible products. They cover a major portion of the commercial world and are utilized by large firms for numerous purposes including marketing, communication, accounting and inter- and intra-departmental support. They also offer a number of benefits that goods and products cannot provide.
A business that focuses on service-based activities typically has a lower start-up cost and can grow faster than product-focused businesses. However, the key to success in a service-based business is having a solid idea of what the value proposition for your customers will be and how you will provide it. A service-based business should also be founded by a person with a strong passion and knowledge of the industry in which it will operate, as well as a good understanding of the competitive landscape.
While a service-based business may not be as lucrative as a company that produces a tangible product, it can still be very profitable and enjoyable. It is not uncommon for a successful service-based business to be run by a single person with limited resources and a low overhead. This type of business has many advantages, as the owner can make decisions quickly and be less constrained by bureaucracy.
Another benefit of a service-based business is that it can be more flexible than a traditional, product-focused company. Unlike a product-focused business, which is generally dependent on raw materials and predetermined design specifications, a service-based business can be customized to meet the specific needs of each client. This flexibility allows a service-based business to remain competitive in a rapidly changing market.
Unlike physical products, which can be stored for future use, services are delivered on demand when needed. This means that a service-based business can be highly responsive to customer demands, but it can also result in inconsistent or unpredictable outcomes. For example, a customer who dithers while ordering at a fast-food counter can make the service slow for everyone behind him.
The most important factor for a service-based business is strong leadership from the top. The management style is different than for a product-based business, as revenue-generating line managers often overrule shared services managers in moments of strategic distress. To avoid this, a service-based company must build systems that ensure shared services managers are able to deliver on their promises to their clients. This is often accomplished by creating processes for quoting work, scheduling jobs and invoicing clients. The processes should be documented and communicated clearly to all employees. This helps to build a culture of accountability and consistency. In addition, it is important for the service-based company to establish consistent standards and procedures for handling each service request. This will prevent confusion and improve the quality of the service provided. These procedures can be developed through a training program or by documenting the results of each task completed. It is a good idea to create an organizational chart for the service-based business that identifies all the people who are responsible for each process.