diff --git a/pagerdutyplugin/resource_pagerduty_business_service.go b/pagerdutyplugin/resource_pagerduty_business_service.go
index 184467094..7e6bbd3af 100644
--- a/pagerdutyplugin/resource_pagerduty_business_service.go
+++ b/pagerdutyplugin/resource_pagerduty_business_service.go
@@ -107,10 +107,11 @@ func (r *resourceBusinessService) Read(ctx context.Context, req resource.ReadReq
 	log.Printf("[INFO] Reading PagerDuty business service %s", state.ID)
 
 	state, found := requestGetBusinessService(ctx, r.client, state.ID.ValueString(), false, &resp.Diagnostics)
+	if !found {
+		resp.State.RemoveResource(ctx)
+		return
+	}
 	if resp.Diagnostics.HasError() {
-		if !found {
-			resp.State.RemoveResource(ctx)
-		}
 		return
 	}
 	resp.Diagnostics.Append(resp.State.Set(ctx, state)...)
diff --git a/pagerdutyplugin/resource_pagerduty_business_service_test.go b/pagerdutyplugin/resource_pagerduty_business_service_test.go
index 6af157831..a57e681c0 100644
--- a/pagerdutyplugin/resource_pagerduty_business_service_test.go
+++ b/pagerdutyplugin/resource_pagerduty_business_service_test.go
@@ -46,6 +46,15 @@ func TestAccPagerDutyBusinessService_Basic(t *testing.T) {
 					resource.TestCheckResourceAttrSet("pagerduty_business_service.foo", "self"),
 				),
 			},
+			// Validating that externally removed business services are detected and
+			// planed for re-creation
+			{
+				Config: testAccCheckPagerDutyBusinessServiceConfig(nameUpdated, descriptionUpdated, pointOfContactUpdated),
+				Check: resource.ComposeTestCheckFunc(
+					testAccExternallyDestroyBusinessService("pagerduty_business_service.foo"),
+				),
+				ExpectNonEmptyPlan: true,
+			},
 		},
 	})
 }
@@ -145,6 +154,27 @@ func testAccCheckPagerDutyBusinessServiceDestroy(s *terraform.State) error {
 	return nil
 }
 
+func testAccExternallyDestroyBusinessService(n string) resource.TestCheckFunc {
+	return func(s *terraform.State) error {
+		client := testAccProvider.client
+		ctx := context.Background()
+
+		rs, ok := s.RootModule().Resources[n]
+		if !ok {
+			return fmt.Errorf("Not found: %s", n)
+		}
+		if rs.Primary.ID == "" {
+			return fmt.Errorf("No Business Service ID is set")
+		}
+
+		if err := client.DeleteBusinessServiceWithContext(ctx, rs.Primary.ID); err != nil {
+			return err
+		}
+
+		return nil
+	}
+}
+
 func testAccCheckPagerDutyBusinessServiceConfig(name, description, poc string) string {
 	return fmt.Sprintf(`
 resource "pagerduty_business_service" "foo" {