The Reason of Blockchain Matters to Small Businesses

There are many disadvantages small and medium-sized ventures face in the current business atmosphere. Despite their status as the backbone of any major economy and integral to GDP growth and other national metrics, smaller firms face high barriers to entry and low insulation from conditions that would barely scratch their larger peers. The current regulatory environment is purpose-built for companies that are several magnitudes larger, and makes it hard to find financing, scale operations, process payments and recruit other ancillary services that are both necessary and yet monopolize the time and resources of small businesses.

With blockchain’s ability to achieve remote, autonomous consensus between users, businesses have quickly figured out that such self-reliant data infrastructure is useful for things far beyond cryptocurrency. It can help bring products and transactional services to market quickly and inexpensively, and offload the traditionally high costs of security, Know Your Customer (KYC) protocols, data storage and other overheads. It not only reduces costs, but also allows businesses of all sizes to compete on a more level playing field.

Piggybacking on blockchain
Small businesses often work solely on scaling, as they should, but this focus neglects and strains the basic processes of invoicing, inventory and payroll that were established at the outset. The bootstrapped peripheral business flows that support a business’s product or service also need to evolve, or risk creating bottlenecks. While this used to mean purchasing a CRM or CMS platform, hiring new employees or contracting with another service provider, blockchain has an alternative solution.

Smart contracts are a more economical option that can help small businesses inexpensively streamline the flows that keep them in business. They use blockchain to create, check and enforce contracts between users, who would be a young firm’s merchants, clients and customers. Whether it be invoicing, paying employees or bills, settling interest fees, creating insurance policies, handling fulfillment of inventory, closing new deals or any other transactional activity, smart contracts can have a positive financial impact on small business.