7 Small Business Problems Blockchain Technology Can Solve
As a small business owner, you persistently look for ways to improve your business, and sometimes you can feel like you’re just spinning your wheels. Though you need to juggle many things daily, you continue to push forward because you believe in your business and what it has to offer the world.
In this digital era, many new technologies are emerging and claiming to solve your business problems. And your goal is to select and adopt the technology that will have a tangible impact on your business.
Blockchain is one of the technologies making a buzz in the business world today. This technology is anticipated by many to change the business landscape for the better.
So what exactly is blockchain?
In simple terms, a blockchain is a digital ledger that records transactions securely and tamper-proof. Once something is recorded on the blockchain, it can’t be changed or deleted because it is stored in chained blocks, and each block contains a cryptographic hash of the previous block along with the timestamp. Also, since it is a distributed database, each transaction is verified by multiple computers, and no one person or organization has control over it.
Although this technology is still relatively new in the corporate world, it has already been adopted by several small businesses because of its potential to solve many common small business problems.
If you’re still not convinced, read on to learn about small business problems that blockchain technology will finally solve.
Small Business Problems
1. Difficulty in securing funding
Banks are often hesitant to lend money to small businesses, and traditional investors are naturally apprehensive about investing in small businesses due to the perceived high risk. However, with blockchain technology, you can secure funding through tokenization.
Tokenization is the process of converting your business assets into digital tokens that can be bought and sold on a blockchain. Doing this gives you access to a whole new pool of potential investors.
2. Expensive cost and slow business transaction processes
Blockchain technology can help your business save on costs and speed up transactions. You can avoid high fees charged by intermediaries like banks for wire transfers, currency exchanges, and international payments.
Additionally, you can get paid faster and won’t wait long for your transactions to be processed because blockchain transactions are verified and completed almost instantaneously. This is in contrast to traditional transactions, which usually take days or weeks before being completed.
3. Vulnerability to Cybercrimes
Small businesses are especially vulnerable to cybercrime because they often don’t have the resources to invest in data security and cyber insurance. Cybercriminals are aware of this and exploit small businesses by stealing their data or holding it for ransom.
With blockchain technology, this is not possible. Data stored on a blockchain is encrypted and spread across multiple computers, making it virtually impossible for cybercriminals to hack into or tamper with the data.
4. Lack of payment security
Payment from traditional transactions can fail due to multiple reasons. Among others are chargebacks or fraudulent activities. These activities can create big financial problems for small businesses as they struggle to keep up with their inventory and operational cost. Blockchain technology allows small businesses to receive payments quickly and securely without worrying about chargebacks or frauds.
Aside from this, you can also securely receive and exchange cryptocurrency payments through blockchain when dealing with international clients.
5. Counterfeited products
If you sell physical products, there’s always a risk that your customers will end up with counterfeit goods that could damage your reputation and hurts your bottom line, as you lose out on potential sales.
Blockchain can help by providing a transparent and tamper-proof way to track your products from the manufacturing process all the way to the end consumer. This way, you can be sure that you are selling only authentic products under your brand.
You can also put codes on your products that customers can use to check their authenticity on the blockchain. If a product comes up as counterfeit, you can take appropriate action to remove it from circulation and protect your brand.
6. Decline in productivity
Blockchain can help your business increase productivity by streamlining processes and automating tasks like invoicing, payments, and product tracking. It will reduce the need for manual input and verification, freeing time for employees to focus on more productive tasks and reducing the chances of human error.
Also, decreasing productivity of small businesses is often caused by the lack of ability to track employee performance properly. With blockchain technology, you can create a secure and transparent system for monitoring employee productivity, identify areas where employees are not meeting expectations, and take corrective action.
7. Problem with scalability
Small businesses, especially those based in developing countries, often have difficulty scaling up their operations due to a lack of resources. Blockchain helps them by providing access to new markets and customers.
For instance, a small business owner in Africa can use blockchain to connect with customers in Europe or the United States without setting up a physical presence in those countries.
This would allow small businesses to expand their customer base and reach new markets without incurring physical infrastructure costs. Additionally, blockchain can help small businesses scale up by providing them access to new financing options as they can raise capital from a global pool of investors.
Blockchain technology is thus poised to solve some of the most pressing problems facing small businesses today. So, don’t hesitate to incorporate blockchain into your business operations! It could be the key to taking your business to the next level.
If you are intrigued by blockchain technology and would like to understand more how it can solve problems for small businesses, you can look at our 2-hour workshop, Certified Blockchain Associate.
Click on the image below to start your journey towards the blockchain technology.