How Web3 is helping small businesses scale

Small businesses represent a significant percentage of most developed and developing economies. They are often the nearest group providing useful services to the people. Small businesses today face many challenges and these limit their growth rate over time. However, the emergence of web3 and its numerous opportunities present a potential for growth if small businesses are to tap in.

In this presentation, I will talk about how web3 is helping small businesses to thrive and grow. But before then, lets look at some of the most common challenges small businesses face. Then we see how web3 is helping them overcome the challenges.

Some challenges small businesses face

Small businesses have a to battle through lots of challenges. consider the following 5:

• Lack of funding: Perhaps this is one of the biggest challenges small business face. Having small capital, small businesses are not able to compete or even secure all the things needed to move their business forward. Lack of capital for example means that small businesses are not able to have a large workforce. Because of not having a large workforce, the business output will not be large too.

Lack of funding limits the marketing capabilities of small businesses. They are not able to have a large budget to invest in marketing. This affects their customer base and business exposure. The above are some direct implications of lack of funding for small businesses.

• Competition from big business: Businesses that are well established over the years dominate the market. They usually claim a large portion of customers, sales and revenue. These big businesses are not limited by finance, hence they are able to flex their financial muscles when it comes to expansion. This becomes a real challenge for small business to cope.

For example when it comes to recruitment, big businesses offer better remuneration than small businesses. Hence, they are able to hire the best hands in the sector and pay them decently. Because small businesses are not able to compete in times of skilled workforce, it adversely affects what they are able to do in terms of output.

• Difficulty adopting modern tools: Small businesses are often left with obsolete tools and machinery because they are not able to fund the adoption of modern business tools. As a result, they are not really swift when it comes to innovation. Modern tools help businesses to innovate, to enhance production workflow and automate many aspects of the business. But small business while admiring business technology and innovation, are really slow to implement them into their system because they have less funding to work on.

The above represent some of the challenges small businesses face and they have struggled to cope. But interestingly, web3 technologies have helped many small businesses to overcome the above and many other challenges. Consider the following:

Web3 to the rescue

Web3 have redefined how data is owned, stored and distributed over the internet. One of the most important aspect of web3 is blockchain technology. Blockchains have transformed data ownership, moving it from the central control of big organizations to distributed networks managed by individuals. This has opened up a world of possibilities that small businesses are thriving on.

Consider how web3 is helping small businesses to grow and scale.

• Decentralized finance: One of the biggest challenges that small businesses have is limited funds. They operate on small capital. Web3 has brought decentralized finance to small businesses which has revolutionized access to funds and other financial instruments. Accessing capital instruments through our traditional institutions is nearly impossible. But decentralized finance which is one of the crucial aspects of web3 presents many opportunities for small business to access funds.

Some of the opportunities brought by DEFI includes collatarized crypto loans. These kind of loan does not require all the paper work and logistics that we see in centralized systems. DEFI loans are easy to access and manage. Small businesses could also participate in other fund-raising projects offered by DEFI such as liquidity pools and staking. There are many defi projects small businesses could partner or make use of their service. One of them is MakerDAO. When they take advantage of such opportunities, they are able to easily access funds to expand their business.

• Business growth tools: Web3 provides a lot of business development tools that small businesses could take advantage of to grow. For example, Web3 projects like MediLedger provide supply chain tools that could helps small business to verify, track, and authenticate goods using blockchain technology. Other blockchain tools that could help small businesses to grow includes identity management system, user verification systems, distributed databases for storing product data, etc. All these are projects built on blockchain technology that forms a big part of web3 which small businesses could utilize for growth.

• Remote skilled workforce: One area that web3 is helping businesses scale is in the workforce. Hiring and paying expert staff is not what small businesses can always afford due to their small budgeting. Again, sometimes, specialized staff is based overseas and small businesses might struggle to secure their services. But web3 now have solutions for these with decentralized marketplaces where small businesses can hire experts and make them work remotely. They accept crypto payments and can work on project basis instead of being employed as fulltime staff. There are many Web3 projects that offer this kind of service. One of them is Deelance.

• Blockchain payment solutions: Blockchain payment solutions is another big opportunity from Web3 which small businesses could leverage. Crypto payments can be used to pay staff or contract workers no matter where they live. Small businesses could accept crypto payments too for the services they render or goods they sell. With the aid of crypto payments, small business could sell to overseas customers and accept payments in crypto. They could make purchases, obtain loans, reward customers and do all kinds of transactions power by the blockchain.

• Community building tools: Another way small businesses could leverage web3 for growth is to connect more with customers and build a userbase. Small businesses could easily develop DAPPs that could be used to do all sorts of things. They could develop a customer feedback DAPP or one for product rating. Another DAPP could be used to obtain user experience from the customers. The wide range of community building efforts that are available through DAPPs is enormous. It is left for small businesses to tap into these and grow or expand their community of users, customers and collaborators.

Conclusion

Small businesses all over the world struggle through many challenges as explained above, but web3 has come up with all sort of tools to help them manage these issues. Teams that run such businesses just need to explore all the tools available to them and utilize these effective to grow their business.

Posted Using LeoFinance Alpha