Blockchain has been the word on everyone’s lips so far in 2018 but what does it really mean? And how can it benefit your small business? Robert Muir, head of B2B online at Currys PC World Business, a supporter of Enterprise Nation's Go and Grow Online campaign, explains.
In the simplest terms, Blockchain is a digital ledger that provides a secure way of making and recording transactions, agreements, and contracts. It works for any scenario where something needs to be recorded and verified as having taken place.
However, and this is what really sets Blockchain apart, rather than using a single ledger book (as we would traditionally), the database is shared across a network of computers.
Everyone on the network then has a record of every transaction, which means Blockchain’s much more secure as hackers would need to attack the entire network to alter any information.
But how can this benefit your small business? Here are three potential uses:
1. Streamlining payments
Research has revealed that small businesses shoulder a whopping £3 trillion globally in late payment debt each year. For many SMEs, this can be crippling as they simply cannot survive without cashflow. These overdue payments are often prolonged by inefficient and outdated practices, which blockchain can help address
By creating individual digital records for each part of the supply chain, small business owners can easily prove when items are sent and received, and therefore bill in real time, reducing payment delays.
Similarly, with added visibility over the supply chain, small businesses can automate contracts, allowing for faster approvals and payments.
2. Accessing finance
Another issue for SMEs can be accessing finance. Banks have traditionally held a risk adverse attitude towards lending to small businesses, often lending at much higher rates of interest.
Wish Finance, the world's first blockchain based small business lender, provides an alternative solution. The organisation offers small business loans with no interest based on a company’s cash flow, rather than its assets.
Wish Finance’s model relies on the business using blockchain technology to have visibility over its clients' point of sale systems, so when the client makes a sale, Wish Finance deducts a small percentage of the value of that sale.
Small business owners therefore don't have to worry about paying large lump sums back, instead they can constantly pay off their loan in smaller, more manageable lumps, leaving more capital liquid that can be invested elsewhere.
3. Purging paperwork
Managing inventories, stock lists and supplier invoices often leaves businesses of all sizes having to tackle mountains of both physical and digital paperwork. Blockchain has the potential to purge this paperwork by automating processes.
With blockchain, small businesses can automate their inventory management systems, sensing when stock levels are low and automatically order more stock. The supplier can also use blockchain to robotically sign a contract, post goods and send an invoice.
And best of all, businesses don’t need to rely on having written records of everything, as you always have a digital record on blockchain!
There is no doubt that we’ve only just begun to scratch the surface of Blockchain’s potential but already it can offer SMEs significant benefits.
Blockchain therefore has the power to revolutionise the way small businesses operate, giving them a unique opportunity to compete like they never have before.
Currys PC World Business supports Enterprise Nation's Go and Grow Online campaign which encourages more businesses to get online and supports existing internet traders to grow through inspiring content and events. Get advice and book event tickets here.
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