Small and Mid-size Enterprises (SMEs) are independent firms with fewer employees and resources. These enterprises are smaller in size but contribute a huge economic value to a country. About two-thirds of the global economy and employment are based on SMEs. However, they face certain challenges in their respective fields due to the competition from larger enterprises. SMEs lack proper database, funds, time, employees, resources, capital, etc.
Adaptation to the new technologies and trends is essential for SMEs to sustain their competitors.
Luckily, they have the best solution in hand to overcome these drawbacks - Blockchain technology!
By incorporating blockchain solutions, we can rectify most of the SME’s shortcomings. Let us get to learn more about various features blockchain can offer to small and mid-size enterprises to increase their overall performance.
Blockchain Technology - Definition A distributed ledger-based decentralized system that stores immutable data and helps to perform secure transactions is known as a blockchain. It acts as a foundational technology for multiple businesses like healthcare, ecommerce, banking, finance, and more.
What do the existing SMEs lack? As the name suggests, SMEs are comparatively small in size and contain less number of employees. They have limited access to finance and don’t have sufficient capital to develop their businesses. SMEs also lack appropriate data management systems, lower marketing funds, and low R&D expenditures.
Boosting SMEs with the Incorporation of Blockchain Technology When integrating a powerful technology into their business, SMEs can experience an uplift in their company performance. Here is a list of some major advantages blockchain can offer to SMEs.
Expanded Market This is one of the best features that help SMEs in reaching a larger audience base to sell their products. With the help of flexible crypto payment methods, retailers can get paid from anywhere around the world. Payments using digital currencies will expand the company’s network and thereby increase the overall revenue.
Cross-Border Payments SMEs have restrictions on international payments as they involve too many formalities and paperwork. On the contrary, blockchain unlocks cross-border payment facilities for enterprises and helps in achieving faster transactions.
Potential Partnerships Blockchain creates boundless opportunities for getting business partnerships with other enterprises in the network. It is because larger enterprises often join hands with SMEs to develop customer-friendly products. This will benefit SMEs to manage risks and also gain support from large enterprises.
Raising Initial Capital In general, most SMEs suffer in raising initial funds to develop their business. In such cases, blockchain can help to get seedling funds from various investors using Initial Token Offering(ITO). ITO is the process of collecting funds from global investors and giving them tokens in return. Blockchain will ensure secure crowdfunding without counterfeiting.
Additional Perks in Executing Blockchain Technology in SMEs Apart from the previously-described benefits, blockchain can offer added advantages to SMEs. Secure transactions with resistance to hacking Reduced costs by eliminating intermediaries Traceability without hectic paperwork Easy data management with cloud storage Bounty programs to gain customers’ loyalty
Wrap Up An SME needs to try out different and new technologies to keep up with the increasing competition. Blockchain technology will be a great choice to consider in small and mid-sized businesses. With the advanced features and automation of blockchain, SMEs can effectively improve their performance. Now, the clock is ticking already! It is time to acquire blockchain development services from a leading blockchain company.