Professional and Business Services

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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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