Explain the various business support services.

1. Insurance: Insurance may be defined as the process of collecting money into a ‘pool’
out of which contributors are compensated for any financial loss suffered as a result
of risks insured against, in order to restore them back to the financial position
enjoyed before the loss occurred.
The need for insurance is caused by risks. These are unfavourable or undesirable
events that may occur and cause financial loss. Events such as fire out-breaks, theft
and accidents may occur and expose the business to financial loss. Business
owners must therefore seek from such unfortunate occurrences by taking
insurance cover.
2. Banking: Generally, a bank is an institution that receives money from individuals and
corporate bodies for safe custody. Such monies are kept in different types of
accounts and may be withdrawn or transferred electronically or by means of
cheques. It is important to note that banks earn their profits by lending money and
making investments in short-term securities. Businesses just like individuals benefit
a lot from services offered by banks which include:
i) Storing money: Money collected from sales will be kept in safe custody at the
bank. Only limited amounts may be stored in ‘safes’at the business premises
for the day-to-day expenditure.
ii) Collecting money: Customers and other business clients may pay money into
the business account in respect of debts owing on account of goods/services
supplied.
iii) Transferring money: Banks may execute instructions by account holders to
make payments on their behalf to third parties. These may be in form of
standing orders, cheque-cards, credit transfers bank-drafts etc.
iv) Lending money: Businesses may also borrow funds in form of loans to
facilitate operations. These is re-paid with interest.
3. Consultancy: These are professional services rendered by experts in business
matters. The services are aimed at solving functional problems or improving the
performance of an enterprise in the market-place.
The expert who is referred to as a consultant, usually has proven experience in
investigating and indentifying business problems and thereafter, making corrective
recommendations. More often he may be called-in to assist in implementing the
recommendations.
4. Legal services: Business enterprises will need legal advice especially when
negotiating contracts with clients (suppliers and customers). Such contractual
agreements are prone to disputes relating to the manner and quality of performance;
with aggrieved parties more often seeking redress before courts of law. Business
firms will therefore, contract various legal firms to act on their behalf in pursuit of
such cases in court.
Legal representation may thus, save the firm from making payments on unwarranted
claims by suppliers, customers, employees and tax authorities. Legal advice may
also pre-empt entry by the firm into dubious contracts thus, avoiding the prospect of
losing money. Moreover, legal advice may assist in securing the best form of
compensation in the event of contracts not performed.
5. Market support services: Entrepreneurs need to access certain critical information
about the market for effective operation. Such information support could centre on
the following:
i) Tariff structures: Knowledge about the nature of taxes payable for trading in
such a market.
ii) Documentation requirements: Knowledge about the type of documents e.g
licenses/permits required to facilitate business operations.
iii) Exchange rates: Information on the currency conversion rates in such markets, especially where payments have to be made in different currencies.
iv) Stock-valuations: Knowledge about the share-values for listed companies on
the securities-exchange. This is important for those wishing to invest in such
companies (buy shares).
v) Legal controls: Knowledge about regulations within the market etc.

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Kavungya answered the question on April 24, 2019 at 07:03