PDSnet Glossary

Term

Categories

Introductory Technical Fundamental Economics Opinion Sectors International Regulatory Other Markets

Versions

Name	synonyms = 1, variations = 2, abbreviations = 3

Publish: (0 = no, 1 = yes)

Definition

A service company is one which sells some type of service to the public rather than a physical product. Service companies do not have the usual working capital problems associated with manufacturing companies. They generally have little or no stock and many of them are paid by some sort of monthly debit order. Perhaps the best example of a service company is Multichoice which was spun out of Naspers. This company has thousands of clients who pay to have access to its TV channels. Before each month begins, their overheads are already paid. They do not have enormous amounts of money tied up in stock, debtors, plant machinery and other assets. Their assets are their employees and their accumulated intellectual capital. This makes service companies easier to manage and less risky than other sorts of businesses.

Edit Glossary Term