Wondering What Is A Service Business?
How does the service business work?
What’s essential to know?
Keep reading as we have gathered exactly the information that you need!
Let me explain to you what a service business is all about!
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Table of Contents
What Is A Service Business
A service business is a type of business that sells services to consumers or other businesses.
In other words, from a business perspective, service businesses perform a task to achieve a specific objective.
For example, a service business can include accounting, professional services, hospitality services, or other types of services that consumers and companies purchase.
Even companies that sell goods and products can have a service business to complement their product offerings.
For example, a software development company can offer implementation services or support services to help clients implement the software or support them in their ongoing use of the application.
Service businesses are classified as the tertiary industry or tertiary sector from an economic standpoint.
What’s unique about service businesses is that they are intangible.
Unlike a product that you can purchase and materially see, service is obtained by performing certain tasks.
For instance, a doctor will provide medical services to cure an ill patient or an attorney will provide legal services to help defend a client in court.
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Service Business Definition
How do you define a service business?
Here are a few definitions that I was able to find when investigating this question:
A service business is a company that provides certain professional support to its clients. In these businesses the product is not a tangible one, instead it is an activity that helps a third party at different areas
A service business is an enterprise composed of a professional or team of experts that deliver work or aid in completing a task for the benefit of its customers.
In essence, a service business is a type of business that generates revenues by selling services to its clients in the form of consulting services, professional services, advisory services, or other types of services offered by experts in a particular area of specialty.
How A Service Business Works
A “service business” is a type of business operation where the company offers a service of some kind of professional services.
Unlike a product that you purchase and that is tangible, a service business does not deliver to you a tangible good but carries out certain tasks for you, executes a mandate, or uses its knowledge and expertise to achieve the desired result.
For example, when you hire an accountant for accounting service, the accountant will use his or her knowledge in the field, experience, and accounting tools to deliver a specific service to you such as preparing a financial statement.
Personal labor and expertise are essential to delivering a great service and ultimately to succeed in a service business.
To sell goods you primarily need things like raw material, components, and parts whereas to render services you need skilled workers and professionals.
Consider a service business to be an enterprise made up of individuals knowledgeable in a certain area of expertise helping their clients or doing a certain type of work for the benefit of their clients.
Since the rendering of a service is more intangible (when compared to the delivery of a product), successful service companies are those who are able to provide an amazing customer experience.
A good customer experience means explaining the scope of the services, providing high-quality services, keeping the client informed of the service progress, making sure the client’s questions are answered, addressing any issues during the project, and anything else that keeps the client satisfied.
Very often, service companies will differentiate themselves from their competitors based on the customer experience offered to their clients.
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Service Business Examples
Let’s look at a few service business examples to better understand the concept.
Example 1
One common service that an individual is likely to need in his or her lifetime is that of a real estate agent for the purchase of a house.
A real estate broker is an individual who helps a person find a new home by understanding the client’s requirements, doing market research, visiting properties, negotiating the purchase of a property, and preparing the appropriate documents.
The real estate agent does not deliver a tangible product to the client but offers his or her experience in successfully navigating the complexities of purchasing a property.
Example 2
Another example would be the services of an attorney.
When a company (the acquirer) is looking to buy a public company (the target), an attorney in the field of mergers and acquisitions can provide legal services allowing his or her clients successfully close the transaction.
The M&A attorney will provide legal services to the acquirer by preparing the necessary contracts and agreements, performing the due diligence, handling all the regulatory filings, negotiating the transaction with the implicated parties, and all other related services.
If the services are provided in a competent and skillful manner, the client will have a higher chance of completing the transaction by achieving the desired result.
Other Examples
Here are some examples of service businesses:
- Athletic training services
- Housekeeping services
- Business consulting services
- Maintenance services
- Graphic design services
- Financial advisory services
- Transportation services
- Web design services
- Content marketing services
- Legal services
- Accounting services
- Engineering services
There are many more examples that I could give but I guess you see the common thread here.
All the service businesses that I’ve outlined here are offered by companies who must carry out a task for your such as offering you expert advice, delivering a product, designing something, or using their knowledge and experience to help you.

Takeaways
So there you have it folks!
Everytime you pay someone to do something for you, you are effectively purchasing services.
We purchase services from others on a regular basis such as paying someone to repair our car, do your taxes, clean your house, walk your dog, and so on.
Service businesses are typically composed of skilled individuals who advise, consult, or support their clients in their areas of expertise.
In this article, I presented to you the meaning of a service business, looked at the business service definition, and went over some examples to help you better understand the topic.
Equipped with this information, good luck in your research on service-based businesses!
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