Business services are activities that benefit companies without supplying physical products. They help with marketing, production and safety as well as lowering costs and increasing convenience. Examples include providing consultancy, training or outsourcing business processes. They can also provide support in finance, supply and management.
In economic theory, service is considered the third tier of industry in three-sector business models along with primary and secondary industries that produce tangible commodities. However, a large proportion of goods and services are not based on traditional goods, but rather on intangibles like experiences, consultation and advice.
The most commonly known category of business services is the financial sector, including banking and investments as well as insurance and payroll services. Other types of business services include legal, consulting and IT. These support businesses by managing assets and infrastructure, implementing new technologies or designing new tools that improve efficiency.
Companies that provide business-to-business (B2B) services typically charge a flat fee or hourly rate for their work. Examples of this type of service include an accounting firm that helps other companies manage their finances for a set price per month, or a logistics company that handles the storage and distribution of products from a supplier to a client. These services may also include value-added warehousing or light assembly for products shipped to customers, as well as custom labeling, packaging and shipping of orders. It is important for business service providers to have strong centralized leadership, in order to balance the competitive autonomy of revenue-generating line managers with the collective value of shared services models.