How is a service company defined?

A service company is defined as a business that provides services instead of products. This means that the primary focus of a service company is to deliver intangible goods—such as expertise, support, or experiences—to meet the needs of its customers. Examples of service companies include consulting firms, law practices, healthcare providers, and educational institutions. Unlike product-based businesses, which rely on inventory and tangible goods that can be sold, service companies often operate in the realm of customer interactions, where their value is derived from the skills and knowledge they provide rather than physical items.

Other choices represent different types of businesses. For instance, businesses that sell physical products or manufacture goods are oriented towards producing and selling tangible items, which differs fundamentally from the service-oriented approach of service companies. A business that operates without employees is not a suitable definition, as many service companies employ staff to deliver their services. Therefore, defining a service company as one that provides services accurately captures its core operational focus.