A business service is any activity that supports a company, but does not produce a tangible product. It includes work that a company might outsource rather than do itself, such as IT support or accounting. Moreover, it might include work that the company cannot easily outsource because of its unique expertise, such as legal advice or executive recruitment.
There are three types of business services: business-to-business, social and business-to-consumer. Business-to-business services are those that help other businesses for a flat or hourly rate. They might help a business operate more efficiently, reduce costs or generate more output. Examples of this type of service business are a management consulting firm or an engineering design company.
Business-to-consumer, or B2C, services are those that help consumers accomplish a goal that they could not do independently due to a lack of expertise or resources. Examples of this type of service business are an airline that flies passengers to their destination, a cleaning service for office buildings or a waste removal company. Business-to-consumer services can also include a computer repair shop or a music store.
One of the largest categories of business services is financial services. These services help companies manage their money, including managing loans and investments. Other types of financial business services include credit card processing and mortgage lending. Other business services include insurance, which helps protect against risks such as fire or theft.
Other business services can include warehousing, which is used for bulk goods. Companies that offer warehousing services might also provide value-added functions such as sorting bulk goods into customized lots, packaging items, controlling and managing inventory, ordering, fulfillment and shipping. They might even perform light assembly or label products.
The category of business services can also include management services, such as training and consulting firms that help a company train its professional and management teams. This type of business service can also include human resources and accounting services, as well as other miscellaneous assistance that a company might need to run its operation, such as facilities management or employee benefits.
The EU has a large and diverse group of business service providers, and the industry accounts for 11% of EU GDP. However, the sector suffers from low productivity and persistent legal barriers. Efforts to address these challenges and increase competitiveness include the Single Market Act EN*** and an initiative called The High Level Group on Business Services.