A service based company is a business that provides an intangible product, skill or service performed by an expert, such as accounting, training or consulting. A service business offers a skill of service that others are willing to pay for, according to Entrepreneur Magazine.
Service companies offer an intangible commodity rather than selling a product that is exclusively owned by the purchaser, as defined by the Business Dictionary. Service based companies can be categorized by using the five unique characteristics of service: perishability, intangibility, variability, inseparability and nonownership. These terms relate to services provided versus tangible goods. Services cannot be stored, owned or separately provided. Services vary because of the human factor involved in providing such service.