Business Services | Characteristics and Types

What are Business Services?

Business Services refer to those services, which are used by business enterprises to conduct their activities. They are necessary for the effective operation of businesses and include banking, transportation, warehousing, insurance, communication, etc. Business enterprises need various services to conduct their operations. For example, From banks, business wants the availability of funds; From insurance companies, business wants their plant, machinery, goods, etc., to be insured, etc. Business services do not result in the output of physical products. There are many business services the business can take help of. Some of the business services are, Training Services, Software Services, Event Planning Services, Consulting Services, Marketing Services, Communication Services, Insurance Services, etc.

Geeky Takeaways:

• Business services often provide customized solutions to meet specific needs.
• Businesses can benefit from outsourcing certain functions to specialized service providers.
• Many business services offer scalability, allowing companies to adjust the level of service based on their current needs.

Characteristics of Business Services

The basic characteristics of business services include:

1. Intangibility: Business services do not include any production of physical products and are supporting activities. These services do not have any physical form; i.e., they can not be touched or seen. Instead, they are experienced through interactions, expertise, and knowledge.

2. Involvement: Customers often play a role in the service delivery process, and their satisfaction can be influenced by their level of participation and communication with the service provider.

3. Inseparability: Services are often produced and consumed simultaneously. The provider and the customer interact during the service delivery process, which can influence the quality of the service experience.

4. Inconsistency: Services are to be used frequently every time. Services do not have consistency and they have to be done exclusively each time.

5. Inventory: Business services can not be stocked or preserved in warehouses. They can not be saved to be used at a future date. The major difference between goods and services lies in inventory only, that goods can be stored but services can not.

Types of Business Services

There are 6 different types of business services:

1. Transportation: Transportation consists of freight services together with supporting and auxiliary services by all modes of transportation; i.e., rail, road, air, and sea for the movement of goods and international carriage of passengers. The hindrance of place is removed with the help of transportation as it makes sure that goods are available to the consumers from the place of production.

2. Banking: For acquiring assets, purchasing raw materials, etc., funds are needed, and necessary funds can be obtained from a bank. The problem of finance can be overcome with the help of banking services. Banks lend money and provide many services such as overdrafts, cash credit facilities, etc. Commercial banks help exporters in collecting money from importers in case of foreign trade.

3. Insurance: Insurance is a contract that covers the loss anticipated to be caused by an unknown event among a number of people who are exposed to it and plan to protect themselves against it. It is a contract or agreement in which one party promises to pay an agreed amount of money to another party in exchange for consideration to make a loss, damage, or loss to anything of value in which the insured has a monetary interest as a consequence of some unpredictable occurrence.

4. Warehousing: When goods are held in stock to make them available as and when required, it is known as Warehousing. It helps businesses to overcome the problems of storage and makes goods available when needed thus, helping in maintaining prices at a reasonable level. It also offers a wide range of services. They are in charge of inventory management, which involves providing the manufacturing departments with the appropriate number of commodities at the right times.

5. Communication: Communication is defined as the process of exchanging messages between or among individuals in order to reach a common understanding. Communication is the most crucial trade support. It is also useful for customers to inquire about goods and services, how to place orders, or the advantages of services, or to file a complaint about a product or provide feedback on services.

6. Legal Services: A company may need to hire legal services to prepare its legal contracts including employment agreements, contracts with suppliers, etc. Professional legal services are required by any business in order to discuss legal issues, seek advice, preparation of legally binding documents, etc.