In today’s hyper-competitive market, small-to-mid sized businesses (SMBs) must use every advantage available to ensure their success. Business owners should always be cognizant of emerging technologies that can offer the slightest edge, and develop an eye for the most useful tools. Blockchain has stepped out of cryptocurrencies’ shadow and is finally showing off its true potential. There are countless ways it is already a driver of change, and nowhere is blockchain more readily visible than its impact on SMB operations.
For many SMBs, the biggest benefits derived from blockchain are purely practical–reducing costs, improving efficiency and more. It may seem risky to dive into blockchain without a roadmap, but the results can be undeniably lucrative. Incorporating blockchain into your plans can help you in these three major ways.
1. Reduce your overhead costs.
One of the most visible benefits blockchain offers SMBs is a quick reduction in overhead costs. There are clear examples on the enterprise level of tangible improvements and costs savings that come from adopting blockchain. Saudi Aramco’s blockchain implementation, for instance, has been projected to create cost savings of at least 5%.
Deploying a blockchain system in your SMB can help lower overhead expenditures by significantly reducing transaction costs. Cryptocurrency payments are handled by peer-to-peer networks and require no centralized verification. This means a small company can accept payment in Bitcoin or another blockchain settlement platform and pay fewer merchant processing fees.
The maturing blockchain sector has even produced some blockchains that can be used with $0-to-no fees at all. Skycoin (SKY), for instance, is a blockchain platform that runs on a completely new consensus (Obelisk, built on the idea of “Web-Of-Trust”). The blockchain uses something that is called “Coin Hours” to pay for the transaction fees, with holders of the coin receiving Coin Hours as “Dividends” for holding Skycoin and the Coin Hours acting as a “fuel” for the platform to run. Slowly but surely services like CoinPayments, BitPay, and many more being built will allow small businesses to process payments fast and with $0-to-no fees.The second way you can lower overhead costs with blockchain is in the automation of key services like legal costs such as lawyers to draft contracts, and other expenditures such as accounting. By using smart contracts, SMBs can save on payroll, invoicing, and reduce the need for external services.
2. Upgrade your technology.
By upgrading your tools, your business can gain a better understanding of the market and react more swiftly to new customer needs and trends. One of the biggest improvements blockchain can deliver an SMB is enhanced analytic tools. Business intelligence is more important than ever, and blockchain provides a backbone for better AI and analytics tools. This includes access to more transparent and reliable data, quicker communication and data-gathering, and a broader reach.
Take for instance Endor, which makes it easy for any data-centric business to take advantage of reliable and fast predictive analytics. An SMB can simply onboard the entirety of its customer data to Endor in any language and pose questions to the system’s “social sphere” that identifies past examples of relevant behavior and supplies likely outcomes based on what the system has learned over time. Another key way to upgrade your operations is by tokenizing your services to gain a value-added and organic means to generate customer loyalty and reward them for participating.
3. Easily become more compliant.
Blockchain proponents have long extolled the benefits of handling identification on the decentralized ledger. Current systems are outdated and vulnerable to attacks, but switching to a ledger-based ID system could quickly eliminate these problems. Protecting your operational and customer data is especially important for SMBs, as any breach could be catastrophic or crippling.
Using the encrypted storage featured by blockchain makes protecting your data drastically easier. Blockchain’s decentralized nature means that hackers have a much tougher time breaching the network, or even decrypting an individual user’s private identity. You can also enhance internal security by incorporating better identification systems.
In the business realm, there are companies that use know your customer (KYC) and digital ID technology to create easy identification platforms for companies of all sizes. This improves data access, transparency, and controls costs for IT while remaining compliant with the strictest certification protocols.