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Overview
The term Professional and Business Services covers a wide variety
of business but can be broadly separated into three parts: the professional,
scientific, and technical services businesses, the administrative
and support sector, and the management of companies and enterprises
sector.
- Professional, Scientific, and Technical Services
– This sector comprises establishments that specialize in
performing activities for others. These activities include: legal
advice and representation; accounting, bookkeeping, and payroll
services; architectural, engineering, and specialized design services;
computer services; consulting services; research services; advertising
services; photographic services; translation and interpretation
services; veterinary services; and other professional, scientific,
and technical services.
- Administrative and Support Services –
This sector comprises establishments performing routine support
activities for the day-to-day operations of other organizations.
These essential activities are often undertaken in-house by establishments
in many sectors of the economy. Activities performed include:
office administration, hiring and placing of personnel, document
preparation and similar clerical services, solicitation, collection,
security and surveillance services, cleaning, and waste disposal
services.
- Management of Companies and Enterprises –
This group of business comprises:
(1) establishments that hold the securities of (or other equity
interests in) companies and enterprises for the purpose of owning
a controlling interest or influencing management decisions (e.g.
Venture Capital Firms).
(2) establishments that administer, oversee, and manage companies
and undertake the strategic or organizational planning and decision
making role for the company or enterprise.
It is rare for businesses in this sector to be made available
for sale through the business brokerage industry.
- Sector Demographics – Estimates from
the US Government Current Employment Statistics for the 1995 -
2004 period show annual average employment in professional and
business services at 23,489,000 at the beginning of the period
and peaking at 30,456,000 in 2000. Due in large part to significant
layoffs in the Information Technology sector employment levels
fell during 2001 to 2003. By 2004, the employment in professional
and business services had rebounded to an average of 29,720,000.
Government Projections indicate that the sector will increase
in employment levels by some 30.4 percent over the 2002-12 period,
which represents the second-highest rate of growth of all sectors
behind Education and Health Services.
Sector Demographics
Estimates from the US Government Current Employment Statistics for
the 1995 - 2004 period show annual average employment in professional
and business services at 23,489,000 at the beginning of the period
and peaking at 30,456,000 in 2000. Due in large part to significant
layoffs in the Information Technology sector employment levels fell
during 2001 to 2003. By 2004, the employment in professional and
business services had rebounded to an average of 29,720,000.
Government Projections indicate that the sector will increase in
employment levels by some 30.4 percent over the 2002-12 period,
which represents the second-highest rate of growth of all sectors
behind Education and Health Services.
Owning a Service Business
Professional and Business Services companies are “people”
businesses. They have few hard assets, their assets are their people
and their intellectual capital. Some have patented and/or copyrighted
practices, procedures and publications which form the basis of their
services, but for most this is not the case. So the first question
many prospective purchasers ask is “What Exactly Am I Buying”.
Services business build a reputation based on customer satisfaction.
Satisfied customers provide a reference base and proof of performance
which can in turn be used to gain future projects and engagements
with existing customers and new prospects. You are therefore buying
the company’s Goodwill and resources.
People management and retention is a key success factor
for businesses in this sector. As your people resources are interfacing
with you customers daily they become the image of the company in
the customers eyes. So to won a business in this sector requires
an attention to people management and motivation and a willingness
to pay good salaries with good benefits to retain the right caliber
of staff.
Performance Statistics for Professional Services Companies
http://www.bizstats.com/scorpservice1.htm
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