Why Small Businesses Should be Making the Most of Blockchain

As any owner of a small business will know, you must continue to innovate and grow the enterprise to survive.

Technology is an area in which all firms – no matter the industry they operate in – can elevate themselves. For many of your ‘back office’ duties, the blockchain could help you to become more efficient, more secure, and more profitable.

But what the heck is a blockchain? It’s a fair question, so here’s your quick guide to blockchain technology and what it could bring to your company.

What is blockchain?

The official definition of blockchain is that it is a ‘distributed, decentralized, public ledger.’

In layman’s terms, that means that you can store information on a ledger that is ultra-secure and completely anonymous. It’s called blockchain because your data is stored in ‘blocks’ that are then saved in a database known as the ‘chain.’

What is excellent about these blocks is that they can store all manner of information – customer details, transactions and order archives, accounting data, and so on.

The technology is ever-evolving and can be personalized, so it does pay to keep up to date with the latest blockchain news to learn how your business can adapt and progress.

How your small business can use blockchain

While the tech behind the blockchain may be confusing or daunting to you, the bottom line is that this technology adds genuine value to many small businesses, and so it makes sense to consider how it can help your company.

Completely private and highly secure, the blockchain is an efficient way to store your company data and keep it safe from fraud and hacking. The blockchain cannot be hacked or manipulated because of the scale of the block, so business owners are assured complete peace of mind.

There are cost reductions from adopting the blockchain. Small businesses tend to have significant overheads in the management of their administration. The blockchain takes away many of the costs – be it in terms of salaries, data management services, and the actual physical upkeep of admin – and it delivers an easy-to-maintain, efficient system instead.

Many banks and financial institutions are adopting the blockchain, and this has a knock-on effect in accelerating the timeframe in which transactions are completed – payments can be processed outside of traditional working hours. That can help with your cashflow, help you to turn orders around more quickly, and buy/sell goods to overseas customers more efficiently.

Smart contracts is a term you will hear plenty more of in the coming years. These are digital contract agreements that both parties in the chain agree to, which are then stored in the ledger and updated automatically – from settling invoices to fulfilling orders.

These smart contracts are a low-cost way to manage a supply chain and order flow, improving the economy of your small business while staying on top of your key, day-to-day operations.

Another use of the blockchain is in verifying the origin of materials and ingredients that your company uses. That enables you to promote yourself as a provable supplier of organic, Fair Trade, or local goods – this can be a competitive advantage in many industries.