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What Is a Service Business?

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  • 0:03 Overview of a Service Business
  • 0:54 Definition of a…
  • 2:19 Examples of a Service Business
  • 4:20 Lesson Summary
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Lesson Transcript
Instructor: Aaron Hill

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

In this lesson, you will get to learn about what a service business is and some of the key attributes for their success. You will also find out why they are so popular and how they play an important part in your life.

Overview of a Service Business

Think about all the times you paid for someone to do something for you. Maybe you paid someone to paint your house, change the oil in your car or even prepare your meal at a restaurant? You likely paid someone to do these things for you because you didn't have the time or skills to do them yourself. Or maybe you just didn't feel like doing it on your own, and it was worth it to you to pay someone else to do it instead.

Restaurants, car service shops, and the like are all service-based businesses. Collectively, they are relied upon to satisfy the needs and desires of thousands of consumers each day. As long as we have limited time, limited knowledge, and simply don't enjoy doing everything ourselves, service businesses will thrive!

Definition of a Service Business

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. The product a service business delivers isn't like a product you buy at the store, such as a television, piece of clothing, or food item. A service business delivers a product that is primarily composed of personal labor and expertise to deliver the desired work. For example, you may use a real estate agent to buy your first house because you want to take advantage of their expertise, negotiating skills, and knowledge of the required contracts.

A big part of whether you are happy with a service business is based on your customer service experience. Your customer service experience is all the things the business does to ensure your satisfaction. This is a key part of the success of these businesses and how they try to differentiate themselves from competition. This includes the quality of work they perform, how friendly they are, the timeliness of completing their job, and their ability to answer questions or address any problems that may arise. Take a minute and think about a business you like to use or are very loyal to. They probably deliver a great customer service experience.

Examples of a Service Business

The following are some examples of service businesses many probably use or are familiar with.

Taxes

Millions of tax returns are filed every year between January and April 15th. Taxes can be confusing, intimidating, stressful, and overwhelming! What starts out as something simple one year ends up becoming more difficult in the future when you buy a home, have a child, or change jobs. For this reason, the tax industry has grown and serves millions of people every year in completing this task that few truly enjoy.

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