What is a Service Business and How Do You Start One?

4 Mins read
  • It is a good idea for aspiring entrepreneurs to understand the nature of service-based businesses and consider starting one.

A service business is one that delivers services to individuals or other companies directly. The service industry is active all around the world and many consumers have regular encounters with such enterprises. Businesses can also have dedicated service departments; for instance, a computer business may have a service department that offers assistance to its customers.

Service is considered the third layer in the three-sector economic paradigm. It is a category that includes businesses that give experiences, consulting, and/or guidance. The agricultural, quarrying, and farming sectors make up the initial sector. The manufacturing and sale of physical goods are included in the secondary sector. Despite the fact that service is classified as tertiary, it is the biggest economic sector in the United States.

One of the fastest-growing aspects of the service industry is the knowledge economy. This entails using data and technology to better understand an audience’s requirements and to satisfy those needs as quickly as feasible.

Marketing a Service Business

Since people happen to be marketing more of an abstract notion rather than a concrete product, marketing a service business can be difficult. In such cases, marketing frequently focuses on displaying successes and emphasizing customer service ideals in order to imply that clients will have a pleasant professional experience with the company. For instance, to attract clients, a lawyer may show a high success rate with specific sorts of cases, whereas a restaurant might take pleasure in delivering excellent customer service that makes visitors feel like honored guests. Founders who are leading service businesses should try to learn from such examples and emulate the ideals underlying them when they begin marketing their own venture.

Setting Up a Service Business

This sort of business might be less expensive to set up than one that manufactures and distributes products. Far less funding may be needed based on the industry. A tech support professional, for instance, might easily work out of his or her own van, driving to customers to provide tech assistance. However, funds will be required to, say, open a restaurant since one will have to lease/acquire and then appropriately equip a space first.

Many people who want to work on their own find that running a service business appeals to them. Such enterprises may frequently be managed by a single member, with the option to expand as required, and they enable people to put their abilities to use in a number of ways. Somebody with expertise and talents that others would find useful might convert their (aforementioned) skills into a living by starting a business that lets others employ him/her for his/her skills or contract him/her to train them. It’s also feasible to include myriad service features into another sort of company. A competent weaver, for instance, could offer weaving lessons in addition to producing finished woven items.

Features of a Service Business

The five features of service businesses are listed below:

(1) Intangible

  • They can’t be touched because they’re intangible assets.
  • They aren’t present in the physical world.
  • It is only possible to experience a service.
  • It is essential to give great customer service so that the client has a positive experience and comes back or even refers others.
  • Example: Teaching by educators, doctor’s care of patients, and so on.

(2) Inconsistent

  • Unlike tangible products, there’s really no uniformity in the services.
  • The service must be conducted exclusively each time.
  • Various consumers have various requirements and preferences.
  • The service provider must generally modify the service on a regular basis.

(3) Inseparable

  • In the case of services, demand and distribution occur simultaneously.

(4) Inventory

  • Services cannot be archived for later use.
  • There is no physical aspect to them.
  • The service’s demand and supply are quite closely related to one another.
  • Service(s) to the customer must be given as and when they request it.
  • For instance, a McDonald’s burger can be stored, but its flavor can only be tasted. The airline ticket may be conserved, but the actual travel can be experienced.

(5) Involvement

  • Customers’ needs are met through the provision of services.
  • Customers are involved in the service delivery phase.

Examples of Service Businesses

Compared to products, services are relatively abstract in nature, surfacing only when requested by the customer, which distinguishes this form of enterprise from the rest. Tourism, consultancy, equipment maintenance, technical support, medical services, utilities, professional services, estate development, legal assistance, and education are just a few examples of service businesses. People are at the receiving end of a service, not of a product, whether they would be receiving medical treatment or studying in an elementary classroom setting.

The Types of Services are as follows:

(1) Business Services

  • Business firms utilize certain services to execute their operations.
  • Banking, insurance, logistics, and communication services are a few examples.

(2) Social Services

  • These are supplied willingly in order to achieve societal objectives.
  • For instance, providing education and health services to employees and their families.

(3) Individual Services

  • These aren’t always constant.
  • Different services are provided to different customers.
  • They are determined by the priority of the consumer.
  • Tourism, restaurants, etc. are examples of individual services.

Other Examples of Service Businesses

Transport Services

Transportation businesses provide services that help people or commodities go where they need to go. Bus services, travelling, taking the train, and ride-hailing are examples of these services. Transit services frequently strive to make travelers as comfortable as they can during the journey. For instance, if a customer is boarding a plane for a lengthy trip, airlines would strive to provide food, refreshments, and blankets to make them feel more at ease.

Childcare Services

Children and toddlers are educated and supervised in childcare services. This gives parents a sense of peace, knowing that their kids are secure and engaged while they are working. Schools, daycare centres, and day camps offer childcare services, with the goal of teaching children, supervising activities and games, and tracking their development.

Landscaping Services

Many customers are served by landscapers who keep their lawns in good shape. Landscapers could visit their customer to let them choose how they want their lawn manicured, after which they cultivate plants, eliminate pests, trim hedges, spread mulch, and mow the lawn.

Pool Services

Pool services include cleansing and maintaining a consumer’s pool on a regular basis, which would include checking chemical levels, clearing away debris, replacing filters, and verifying that the water is safe to swim in. They could also do pool equipment repairs, such as patching a leakage or mending the drainage system.


Customers rely on the service sector to supply them with services that fulfil their demands and make their lives simpler and better. Customers’ demands are always kept first in service firms, and it is the company’s goal to meet these demands. When it comes to establishing a business, knowing what service businesses are can help you better appreciate the significance of customer service.

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About author
Jasmine Williams covers the good and the bad of today's business and marketing. When she’s not being all serious and busy, she’s usually hunched over a book or dancing in the kitchen, trying hard to maintain rhythm, and delivering some fine cooking (her family says so). Tweet her @JazzyWilliams88
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