What is a service business?

A service business is defined as a company that primarily provides intangible products or services to consumers. This means that instead of selling physical goods, a service business offers activities or benefits that satisfy the needs or wants of customers. Examples of service businesses include salons, repair shops, educational institutions, and consultancies.

The distinction between tangible and intangible products is crucial; tangible products can be physically touched and owned, whereas services cannot be owned in the same way and are often experienced or consumed as they are being delivered. This differentiation highlights the nature of service businesses and why they focus on the experience and satisfaction of the consumer rather than on the sale of physical items.