We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What Is a Service-Oriented Business?

By Alan Rankin
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A service-oriented business is one that provides a service to its clients or customers. Businesses and other enterprises generally are classified by whether they provide goods or services. Those that provide goods include farms, mines and manufacturers. Banks, retail stores and communications media are all examples of service-oriented businesses. Such businesses form the service industry, which represents a major sector of the economy in developed nations.

Most analysts classify economic, or money-generating, systems by how they operate. Systems based on natural resources, such as agriculture, logging and mining, are called the primary sector, used in phrases such as “primary sector jobs.” Manufacturing businesses such as factories are considered the secondary sector, and the service industry is sometimes called the tertiary sector. A simpler division is the commonly heard phrase “goods and services.” In this analysis, the first two economic sectors represent “goods,” and everything else is a service.

By any reckoning, service-oriented businesses contribute to a major portion of the global economy. By some estimates, nearly one-third of all jobs are part of the service industry. Income generated by these businesses create as much as three-fifths of the world’s wealth in any given year. In developed nations such as the United States, Japan and most of Europe, service-oriented businesses compose the majority of business enterprises. In developing nations, primary- and secondary-sector businesses generally are more prevalent.

The definition of a service-oriented business is very broad. Service-oriented businesses include restaurants and groceries, as well as retail stores of every type. The transportation, travel and hospitality industries also are vital services that allow people and cargo to go anywhere in the world. Healthcare is a service-oriented business, as are the industries that maintain buildings and other public infrastructure. Information services, including software companies and Internet-based businesses, have become such an important part of the service industry that they sometimes are considered their own economic sector.

Some parts of the service industry do not qualify as a “business,” such as public services — police, firefighters or even government, for example. Other industries, such as healthcare or prisons, vary by country. In some countries, these are managed by government agencies, and in other countries, they form part of the service-oriented business community. In the 21st century, the question of which services should be publicly or privately funded has become the subject of lively debate. When public services are reduced by financially struggling governments, they sometimes are taken over by for-profit businesses, a change that is controversial to many people.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By healthy4life — On Jan 16, 2013

Healthcare is the most valuable service-oriented business, in my opinion. We could do without restaurants, salons, and hotels, but when we are sick with pneumonia and need antibiotics, we might just die without the help of a doctor.

There have been times when I've had life-threatening illnesses that my doctor stopped in their tracks. Common sicknesses like strep throat can turn deadly if they are allowed to progress to something worse.

By Perdido — On Jan 16, 2013

I've always thought of service-oriented businesses as companies that offer you an experience rather than something you can touch. This isn't always the case, but it is with some places, like travel agencies and hotels.

Travel agencies offer you a good time and the chance to make memories. Hotels offer you a place to sleep and eat, as well as a pool to swim in and a hot tub for relaxation.

The more you are willing to pay for things like this, the more luxurious your experience will be. You are paying for the quality of the service.

By StarJo — On Jan 15, 2013

@OeKc05 – I know that waiters are motivated to keep customers happy because their base pay is so low. Tips can make up for this.

However, some restaurants force the waiters and waitresses to split the tips at the end of the night. I think that this is a bad decision for any service-oriented business.

By OeKc05 — On Jan 14, 2013

My friend is a cosmetologist, and she is definitely in the service-oriented business sector. She does her customers hair and/or makeup in exchange for a fee, and she also gets tips.

I think that any business that expects customers to tip the workers is probably in this sector. The tips are based on how well the worker provides the service, so often, the base pay isn't very much. I think this motivates people to do their best at the job.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.