Businesses that have ventured into the service industry generate services rather than tangible goods. The sector comprises of communication, banking, professional services whole and retail trade. Over the recent past services sector have experienced robust growth in all countries around the world. The service output currently represents at least half of the state’s GDP, since the service output is experiencing rapid extension. The tremendous expansion has been facilitated by several factors such as changes in social patterns, new business trends, pros of privatization, internationalization, and globalization. These have made the business environment more favorable for young entrepreneurs to venture into the service industry. At a personal level service industry has become more lucrative for these three main reasons.
The business does not require a buildup of reserve inventories for the company to run. This is because the product being sold can be a person or a skill, and you’ll only need one or two pieces of equipment required to perform the required service. Therefore, the firm incurs a low cost to start up the business.
A service industry tends to be more adaptable compared to product-based companies. Since jobs are taken as they come rather than having a fixed set of schedules that dictates where one needs to be and at what time, therefore, in the service industry, people have the choice to work wherever and whenever they feel like and can adjust their offerings on the needs of their customers.
In service industries, people develop relations and connections with the clients since the process requires the service provider and the customer to engage personally. Therefore, individuals not only gain profits but also earns a sense of fulfillment by assisting others.
Like any other business service industry, it has several challenges, such as difficulties in making projections since it is hard to measure the competitive rates and determine the best time for a given service since they are highly variable. Additionally, selling a service is challenging since it cannot be touched, felt, or tasted.