Business services are activities that benefit companies without supplying them with physical products. They include a large segment of the economy and cover a vast number of industries. Large firms especially rely on these types of services for marketing, cost and production reasons.
In contrast to goods, the value of a service cannot be stored or transferred between consumers. As a result, consumers tend to view them as extras rather than necessities. In difficult economic times, consumers may cut back on services in order to save money.
Many of these activities are provided by contractors. This helps businesses to maintain quality control and focus on their core competencies. For example, some companies hire contractors to perform office maintenance or build new spaces. Others contract with day care services to help employees achieve a work-life balance. Other services are performed by staff members in a company. For instance, a human resources department may provide employee training or an in-house legal service.
Whether providing business-to-business or business-to-consumer services, it is important to understand that there are three types of business services: