How Blockchain Will Impact Small Business
You may automatically connect the word “blockchain” with the field of cryptocurrency.
While the technology is a major player in that field, it also has other extremely useful applications, many of which are highly valuable in the world of small businesses and start-ups.
So what precisely will be the impact of blockchain technology on small scale business ventures? Here, the UK-based quick cash homebuyers Property Solvers will discuss some of its main advantages.
What exactly is Blockchain?
Blockchain technology is regularly talked about, but its full potential is rarely fully understood. Despite the complex jargon that is regularly employed by those who specialise in this resource, at its bare bones it is actually surprisingly simple.
Blockchain is just a series of data records that are permanently added to every time an official action or transaction is undertaken. It employs a “ledger system”, which means that a new “block” containing fresh, accurate data is added to the chain with every interaction.
The data contained in that “block” cannot be edited or modified.
In the world of cryptocurrency, this reduces the possibility of fraud and helps to regulate value independently of banks. However, in a broader sense, this form of distributed ledger technology can help to streamline systems and ensure the safety and privacy of any and all records, along with numerous other benefits.
The chief benefits of blockchain in small business
Typically, the owner of any new business has an immediate set of hurdles to overcome. It’s rare that they are able to afford a large number of employees at the start, but they very quickly develop a huge number of responsibilities.
It can be a stressful and complex time, with new business owners working way beyond the hours for which they are able to pay themselves, and it’s rare that they can afford enough personnel to relieve any of the pressure within their first year of trading.
As a result, the founders of a business usually work long hours and are forced to prioritise some tasks, letting others fall behind. This is one of the many reasons why many new businesses fail right at the start.
Through the use of blockchain technology, small businesses can streamline their duties and cut out costly middlemen. Blockchain can be used to:
- Develop and verify contracts and ensure that they are followed to the letter
- Undertaking automated inventory fulfillment
- Making payments – of wages, taxes, overhead bills or anything else
- Manage cash flow
- Keep records that cannot be modified or erased
There is a great deal more potential besides, depending on the type of business and its products and services.
Because of the ledger system employed by Blockchain, every time an interaction occurs – whether it is between business partners, employers and employees or contractors, or the business and a customer – it is recorded in a way that cannot be changed.
These records can be used to create and enforce what are sometimes known as “smart contracts” – ones that cannot be manipulated or duped.
This offers small businesses a level of protection it would otherwise never be able to afford, allowing it to compete with larger rivals and grow much more quickly than would have previously been possible thanks to its new streamlined format and lower overheads.
Access to data
Data handling is vital in today’s business world, but is often time-consuming and costly. For this reason, the transparency of blockchain’s data collection is extremely valuable.
Using this technology, a business and its customers will be able to see all data that is relevant to their transaction, and can take into account whether or not it has been changed at any point – and how.
This hands the power back to smaller businesses that would never have been able to afford or execute this level of secure data handling without the availability of this system.
Safe and affordable data sharing between small companies can also be made much easier through blockchain. This means that small businesses will no longer have to rely on larger companies and corporations to be their data sources as they once did.
Customer care and dispute settlement
HR and customer services are expensive fields that generate a great amount of paperwork, require a sizeable workforce and take up a lot of time and space.
A blockchain system can automate these sectors to a considerable degree, as all actions that have been recorded in each ledger are irrefutable and easily provable, nullifying the possibility of numerous disputes and causes of arbitration.
The provision of legal assistance to small businesses will also be made much easier, with all the evidence required securely recorded and available for all to access.
Big brands usually command the greatest level of customer trust. Many of them have presided over their sectors for generations and have the capital to advertise regularly and powerfully, attracting more and more customers every year.
However, with blockchain comes a whole new way in which that trust can be built. While smaller companies and startups may not have the history or presence that their bigger rivals have, customers who understand the benefits of blockchain are likely to seriously consider buying from a brand that uses this technology.
This is mainly down to the sense of security and absolute transparency that can be achieved through blockchain and in no other way.
Informing customers that you use a blockchain-based system will show them that, when using you, there will be no way that they can be scammed, defrauded or given incorrect information without that information being immediately recorded in a way that cannot be modified.
One of the most exciting aspects of the application of blockchain within small businesses is that it allows younger or potentially more vulnerable companies a level of independence that they have never enjoyed before.
Their reliance on larger firms can be significantly diminished, offering them greater capacity to grow and somewhat levelling the playing field, presenting them with the prospect of further unimpeded development.