Unlike goods-oriented companies that sell products like sports equipment, consumer electronics and clothing, service-oriented businesses offer services such as car repair, dentist visits and massage therapy. These types of companies may be structured as a sole proprietorship (a one-person business owned by an individual) or a partnership (two or more people who share ownership and profits). Business services jobs include roles in the fields of information technology, engineering, architecture, law, advertising, consulting, marketing, staffing, waste management, facilities, shipping and administration.
Most industries have at least some service-based companies, including restaurants and retail stores, health clubs and fitness centers, hair salons, banks and insurance companies and professional services firms. Compared to goods-oriented companies, service-based enterprises are less expensive to run and generally more lucrative than their product counterparts. Consequently, students interested in starting their own business should pay special attention to the strategies of service-based enterprises when conducting career planning and evaluating potential business ventures.
While many industries have a large number of different business-to-business service providers, the majority of these companies are smaller than their counterparts in the consumer marketplace. Often, these businesses offer highly specialized services that companies can’t easily do in-house, such as creating an online store to sell company logo merchandise. Some of these businesses also provide support to multiple departments within a corporation, which is known as shared services.
Using business-to-business service providers helps companies save time and money, and they allow companies to focus their resources on the production of their goods or services. In addition, using these types of external service providers provides businesses with the flexibility to scale their operations up or down depending on seasonal output demands.
For example, a company that manufactures computer chips will need to use a service provider to provide them with additional circuit boards when demand increases during the holidays. In addition, these providers can help ensure that the quality of a company’s service is consistent by working with other service providers to develop standard operating procedures.
The success or failure of a business-to-business service provider often comes down to four things, according to a report published in “The Wall Street Journal”:
Whether the company delivers on its promises; offers competitive prices; is easy to do business with; and has a strong reputation for providing high-quality service. All of these factors can have a big impact on the company’s bottom line.
While there are a number of benefits to using business-to-business service providers, there are some disadvantages. Some of the more obvious problems include slow or inaccurate response times, the inability to customize offerings and the inability to track performance. In addition, some service providers can be difficult to work with if they don’t understand the needs of your business. For instance, a customer who dithers while waiting at a fast-food counter can make the experience slower for everyone else in line behind him. This type of behavior can affect the efficiency and profitability of the whole chain.