5 Characteristics of Business Services


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Business services

Business services are additional activities that support a firm’s primary operations. They can range from intangible goods such as computer software, telecommunications and consulting to the supply of raw materials, inventory management and even top level strategy like mergers.

While all the work a business does can be considered part of its business services, there are five characteristics that distinguish them from regular products and physical goods:

1. Intangibility. Because a service is an activity, it cannot be touched or physically experienced. Instead, it is created through interactions, expertise and knowledge. This means that the quality of a service can be influenced by how well it is delivered and whether customers are involved in the process.

2. Non-separability. Because a service is an activity, there is no separation between production and consumption. Hence, a good can be sold to one customer and consumed by another at the same time. Also, unlike a physical product that can be stored for future use, a service has to be performed exclusively every time.

3. Inconsistency. Because a service is an activity, the demands and expectations of different customers are varied. This means that a service provider needs to adapt to the individual needs of each client.

4. Lack of inventory. Because a service is an activity, they cannot be stocked or preserved for later use. This means that the amount of a service is directly proportional to its demand.

When a business service is not in use, it can be conserved by not using resources or by automating its processes. This leads to cost reduction, management of risk & compliance and sustainable profit growth for businesses.