Goods are physical products that are bought and sold. For example, food, clothing, an iPod or a video game are all goods. Services are activities provided by a person or a company which enhance a person's life/well being or are convenient and time saving. Examples of services include things like a spa services, child care, home renovations or landscaping.
A business could be created which offers a good or a service. For example, a lemonade stand sells a physical product, lemonade, so it is a goods based business. Or you could provide babysitting in your neighborhood this would be a service based business. You can also combine the two; for example, you could have a lemonade stand and charge an extra 5 cents for a delivery service.