The Service Industry of Today

For many years, the service industry continuously grew non-stop. It is only normal though for the service industry encompasses a wide range of industries under its wing. Thus, this led people wondering what is the service industry, what types of business models operate in it, what are the latest trends that caused its growth and how? then what will become of the service industry in the future?

 

Service Industry – Definition, Divisions, Industries, and Service Industries Categorization

An economy is divided into the major sectors: Raw Materials sector (Primary), Manufacturing sector (Secondary), and Services sector (Tertiary). Another way to call it is the Three-sector model in Economics where the main focus of activity shifts from primary, through secondary, and then finally to the tertiary sector.

In the primary sector of the economy, raw materials sector, it is an industry mostly involved in the extraction and collection of natural resources or raw materials, e.g. mining minerals, making timber, farming, fishing, etc., also the transforming of natural resources into final products is under this industry.

As for the secondary sector, manufacturing is an industry that includes industries that produce finished usable products or a part of the operations in construction. Basically, in this sector, it takes the output of the primary sector and manufactures the complete finished goods to be distributed to the consumers.

The tertiary sector, services, is mainly involved in the production of services instead of producing finished products towards businesses as well as final consumers. Usually, this industry requires specific skills such as providing attention, advice, access, experience, and affective labor. Services included in the industry encompasses a wide range of industries which is further divided into different divisions of major industries such as:

1. Transportation, Communications, and Utilities Industries
   
2. Distribution Industry
   
3. Retail Industry
   
4. Finance, Insurance, and Real Estate Industries
   
5. Public Administration Industry
   
6. Services Industry

Actually, the service industry is hard to define and encompass. But, one thing is definite about the service industry, it is an industry that provides services to the masses in many ways instead of just producing goods.

Here is a list of the industries under the Services sector:

• Hospitality Industry
  
• Personal services such as dry cleaning, hair salon services, etc.
  
• Business services such as agencies, business software developers, etc.
  
• Information Technology Industry
  
• Miscellaneous repairs
  
• Mass Media
  
• Amusement parks and recreation
  
• Healthcare
  
• Franchising
  
• Education
  
• Social services
  
• Museums, zoos, and botanical gardens
  
• Membership organizations
  
• Financial Services e.g. Banking, Insurance, Investments
  
• Professional Services e.g. Engineering, management consulting, legal services
  
• etc.

The service industry division includes a wide range of various industries but due to the huge number of industries included, it is categorized even more into primarily consumer-oriented which means providing services directly to a consumer, primarily business-oriented which means providing services directly to other businesses, or could be a mix of both consumer and businesses services.

Another thing that further defines the services industry is by determining the difference of their economic activities such as:

• Physical – activities that involve working with physical objects, e.g. fixing cars, laundry services, cooking, etc.
  
• Intellectual – activities that involve honing intelligence by providing training or education, e.g. school, technical or training centers, etc.
  
• Aesthetic – activities that involve providing artistic or visual experiences such as musicals, paintings, museums, etc.
  
• Experiential – activities that involve providing recreation such as theme parks, amusement parks, zoos, camps, etc.

There are many more ways to categorize the industries which belong to the service industry, but basically, every single one of the existing industries that provide services, are already a part of the service industry.

 

The Service Industry of Tomorrow

Believe it or not, more than 90% of the overall workforce is under the service industry, according to the Labor Statistics of most of the top-ranking nations. Before, it used to have the same percentage as manufacturing, but due to technological advancement, manufacturing industries rely more on technology rather than a large number of workforce. Thus, making the service industry as the top when it comes to hiring people to provide services.

There are actually three industries within the services sector that experienced the most growth:

1. Business Services
   These are services targeting businesses which boomed due to the rise in demand for personnel supply and computer services. Personnel supply includes either temporary or traditional employment agencies and other organizations that supply workforce to other companies. As for computer services, it includes mass-produced software, custom services for either programming, computer systems design, and computer leasing. The primary reason why this industry is booming is due to the changes in business processes. This can be linked to the broad economic developments relevant to services. Whether in using new technology, new trends, and other factors that brought about great changes on how business is run nowadays, the business services industry took advantage of it and now it is one of the divisions that experienced the most growth.


2. Health Care
   There are four groups in this industry that requires a large of workforce to provide services such as the offices of physicians and other special practitioners, nursing and personal care facilities, hospitals, and home health care. The reason for the growth in this industry is due to new discoveries of medical procedures which requires additional personnel to assist and perform. Another reason is due to the growing population that needs health care either young or old.


3. Social Services
   These are usually provided by the government to encourage and build stronger communities, and also to promote equality and opportunity to the masses. This encompasses daycare for children, residential care for the elderly, other family services; engineering and management services; private education; recreation and amusement; membership organizations e.g. church, clubs, etc. With the ever-growing population and the need for recreation, it is no wonder that the social services industry has grown quite a lot.

Even now, the services industry kept on growing due to the never-ending demand in the market for services. In the future, there will be even more demand for the service industry. Thus, there will be a significant rise in job hiring in this industry. There will be continuous changes in trends, technology, and other processes or systems in businesses, hence, affecting the demand for different kind of services in different industries.

 

Businesses in the Service Business Industry

Providing services as a business are emerging due to the rising demand in the market, especially nowadays that time is of the essence - wanting things to be done fast, low attention span, and time constrained. This resulted in piquing the interest of many businessmen, entrepreneurs, companies, and others, to join and take advantage of the potential profitability of the startup venture projects in the service industry.

The service business Industry encompasses businesses such as Gas stations, Marketing firms, Repair service business, Cleaning or Janitorial business, and many more service business that provides services to the market. These businesses are deemed important and considered as a part of the consumer’s day to day lives. The service businesses also help with the growth process of the economy, which is a win-win to those who embark in this industry.

 

Financial Planning to Start a Service Business

Financial planning goes hand in hand together as one starts a business in any industry. The same in a service business, preparing for a financial plan to start a service business will help you make sensible decisions and achieve your goals for your business, which is to be successful. This will also prepare you for certain circumstances that will affect the operations of your business whether good or bad. Thus, it is always better to be prepared ahead of time rather than be sorry later.

Do you want to start a service business or interested in startup venture projects in the service sector? Are you in need of a business plan or financial plan to foresee your business’s or potential investment project’s financial feasibility? Just like in every business, preparing before deciding on your business is a must. So, to ensure and back up your decision, creating a business plan or financial model is the answer.

 

Download Service Business Model Templates

Starting from scratch is a hassle and every businessman knows that. Even the investors will find it troublesome and most are not experts when it comes to calculating the graphs or interpreting the financial statements. If one is given an opportunity to work faster and efficiently for a less price, with instructions that are easy to understand, then why not?

Above is a list of financial model templates in Excel specially designed for service-centric businesses or startup venture projects in the service sector. These service business model templates are ready-made and easy to edit, giving you an easy way to calculate the figures in your business or potential investments efficiently.

Included are financial projections of the business, forecasting, charts and spreadsheets for better visualization of the business’s value, IRR, financial statements and other things that will help with the management of the business.

No more spending a lot of time and resources in creating a financial plan from the scratch, download service business model templates instead. Believe in our capability to address your needs and all the financial modeling know-how as we provide you industry-specific, easy to edit, financial model templates in Excel.

If you are looking for a specific financial model template and couldn't find it in our inventory, feel free to comment here: Missing Financial Model Templates, so that our Vendors will pick up that project and will soon add in our still growing inventory.

If you found the template but need help with customization of your preference, we also offer financial modeling services which you can avail here: Custom Financial Modeling Service.

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