In today’s fast-paced and highly competitive business ring, small businesses often face numerous challenges when it comes to growth. As much as they are taken as an inseparable part of every business, currently, they can seem like an endless flood. This is where blockchain technology can come into play.
Limited resources, lack of trust, and complex transactions can inhibit a business’s ability to succeed in the market. Adding to that world shake-ups with the pandemic and conflicts easily can lead to the breaking point. Or not?
Recent years have also generated an idea with transformative potential across various industries – blockchain technology. Market prediction for CAGR of 85.9% from 2022 to 2030, shows significant attention around this innovation. Furthermore, it reflects the trust in its potential to accelerate small business growth and revolutionize its operations.
While most commonly associated with cryptocurrencies like Bitcoin, blockchain has far-reaching implications for small businesses. It offers solutions for improving various aspects of business operations and accelerating growth.
In this article, we will explore how small businesses can utilize blockchain technology to boost their growth and gain a competitive edge.
“[Blockchain] is the biggest opportunity set we can think of over the next decade or so.”
Bob Greifeld, Nasdaq Chief Executive
How Blockchain Technology Can Accelerate Small Business Growth
Staying competitive in the market for businesses, this means staying up to date with the trends. Blockchain is one of the technologies coming with a lot of new opportunities. Created as a decentralized digital ledger, its characteristics offer a transparent, secure, and immutable environment.
Depending on the preferences and the resources, there are two ways in which businesses can step into the world of blockchain technology:
- Creating own blockchain ecosystem
- Relying on existing customized solutions
Small business strategy support in finding the best course of action can be a good preliminary step to this topic. Regardless of the way to implementation, benefits are to be expected in all cases.
Secure and Efficient Payments
The traditional payment system is a synonym for multiple intermediaries, which is a synonym for higher transaction fees, longer settlement times, and increased vulnerability to fraud.
Blockchain-based payment system eliminates intermediaries and enables direct peer-to-peer transactions. These transactions can be executed quickly and can have a global reach. At the same time, businesses can easily track and reconcile their financial records.
Innovate Purchasing Process
The payment process can be the easiest step to start adopting blockchain technology. It starts with opening up to and embracing cryptocurrency. For businesses looking into cooperation, the answer can be an established payment infrastructure provider.
MoonPay offers simple integration, global reach, partner network, customer network, etc. It offers a wide range of services: to buy Ethereum with MoonPay, accept payments in various cryptocurrencies, convert fiat currencies to cryptocurrencies, customer support, etc. Such cooperation brings into the business relationship a network of partners and customers.
Improving Data Security and Privacy
Data security and privacy are paramount concerns for businesses of all sizes, including small businesses. However, compared to large companies, cybercriminals are expecting small players to lack in this field. This presumption or inside knowledge has proven right. 25% of owners that had lost their business last year due to cyber attack.
Cyberattacks and data breaches can be devastating, leading to financial losses, reputational damage, and legal consequences. While cybercrime is constantly on the rise, types of threats are also constantly evolving.
The most common threats that businesses are facing today are:
To avoid fatal outcomes, prevention is crucial. Blockchain technology offers security features that can help small businesses safeguard their sensitive data and protect their customers’ privacy.
Blockchain’s decentralized architecture makes it resistant to tampering and hacking attempts. Each transaction is recorded on multiple nodes across the network, making it extremely difficult for malicious actors to manipulate the data. Additionally, blockchain uses advanced cryptographic techniques to secure the integrity and confidentiality of the information stored within the blocks.
Enhancing Supply Chain Management
A supply chain is one of the top challenges that small businesses are facing today, especially in the manufacturing sector. This is one of the key areas where blockchain technology can benefit small businesses.
Traditionally, supply chains involve multiple intermediaries, which can lead to inefficiencies, delays, and increased costs. By implementing blockchain technology, small businesses can create a transparent and immutable ledger that records every transaction and movement of goods throughout the supply chain. Results are accurate product origin tracking, verifying the authenticity of goods, and ensuring compliance with regulations.
This transparency helps build trust among customers and partners, enhancing the reputation of small businesses. Additionally, blockchain can enable automated smart contracts that trigger payments and streamline the procurement process, reducing administrative burden and optimizing inventory management.
Unlocking Access to Capital
Access to capital is another significant challenge for small businesses seeking funding for growth and expansion. While some struggle with the frustrating qualification process, others are struggling with the frustrating administration process.
In addition to the recent developments in the banking industry, no wonder that concern about access to capital is increased. Blockchain technology has the potential to disrupt traditional fundraising methods and provide new avenues to access capital:
- Crowdfunding platforms can offer funds directly from a global pool of investors
- Peer-to-peer lending, where small businesses can borrow directly from individuals or organizations without the need for intermediaries
- Creation of digital tokens or assets, tokens can be traded on secondary markets, providing liquidity to investors and opening up new opportunities to attract funding.
This disintermediation reduces costs, speeds up the funding process, and offers more flexibility in terms of loan terms and repayment options.
Enhancing Trust and Customer Engagement
“The purpose of a business is to create a customer who creates customers.” –Shiu Singh
To build such a successful chain, businesses need to focus on trust as the essential link. Blockchain technology has the potential to strengthen this link by providing transparent and verifiable information to customers.
All blockchain characteristics: disintermediation, transparency, immutability, traceability, and authenticity with joined forces can enhance customer trust.
Transactions recorded and verified across multiple nodes in a network promise transparency. This allows customers to have a clear view of transaction history and ensures that data cannot be easily manipulated.
Each transaction or piece of data is encrypted and linked to the previous transaction, creating a chain of blocks. They can trust that their sensitive information, such as personal details or financial data, is stored securely and cannot be easily compromised.
Blockchain can be used to verify the authenticity of products or digital assets. By utilizing unique identifiers, customers can verify the origin, provenance, and authenticity of goods or digital content. This helps in ensuring customers are receiving genuine products or services.
With blockchain-based identity solutions, customers have more control over their own data. They can store their identity information on the blockchain and selectively provide access to specific parties when needed.
Disintermediation reduces the reliance on centralized authorities and the potential for fraud or manipulation. Customers can trust that transactions are executed directly between parties, reducing the risk of third-party interference.
Blockchain-based smart contracts are self-executing contracts with predefined rules encoded on the blockchain. They automatically execute when specific conditions are met. Customers can trust that the agreed-upon terms will be enforced without the need for manual intervention.
Implementation of this technology is also an entry ticket in responding to a new generation of customers. Have in mind the virtual world – in its development phase, already becoming an increasingly popular concept.
Steps to Blockchain Technology Implementation
Implementing blockchain technology in a business requires careful planning and consideration. Here are the key steps to follow when implementing blockchain:
- Identify use case
- Evaluate blockchain platforms
- Design the solution
- Development and testing
- Network setup
- Integration and deployment
- User training and adoption
- Monitoring and maintenance
It’s important to note that blockchain implementation requires technical expertise and a deep understanding of the technology. Consider engaging with blockchain consultants or partnering with experienced blockchain development companies to ensure a successful implementation.
Blockchain for Small Business
Blockchain technology holds tremendous potential for accelerating the growth of small businesses. By implementing the blockchain in supply chain management, payments, data security, fundraising, and customer engagement, small businesses can streamline operations, reduce costs, enhance trust, and gain a competitive edge.
Small businesses can turn towards existing solutions and relations with established partners or towards creating their own infrastructure.
It can be useful to prioritize understanding the fundamentals of blockchain technology, engaging with blockchain communities and networks, considering friendly blockchain development tools and platforms, or considering hiring blockchain experts or consultants who can provide guidance and expertise.
“No time for wasting”. Embracing blockchain technology today owners can position themselves for success and thrive in the digital economy of the future.
Natasa Dragic – Sass content writer. She is experienced in the hospitality industry, primarily cruise ships. A VIP and luxury customer experience agent, she gained insights into IT and Saas. She merged her passion for writing and her new-found area of interest to build a new career for herself.