Apple Growth Partners

Blockchain Will Bolster, Not Displace, Small Business

Blockchain image
By Chuck Mullen, CPA, CMA, MTax, CGMA | Chairman

While much has been written about blockchain’s utility in big corporations, there is a growing realization that blockchain could also be the best arrow in the quiver for “the rest of us,” small and midsized businesses (SMBs). Seemingly, there will be disruption, and displacement and complete replacement of many companies and jobs due to blockchain technology, but this article posits that such chaos will not be happening on Main Street USA. Conversely, blockchain applications will complement and enhance SMBs, and it could very well become SMBs’ favorite accessory.

Ostensibly, we are 5-10 years from blockchain becoming mainstream in all its forms, and some estimates even say 15-20 years. The delay is not in the technology, but rather, acceptance and consequent coopetition between organizations, executives, and their ecosystems.

Through the use of complex algorithms, cryptography used in coding blockchains assures transparency, accuracy and fraud prevention at a level we’ve never seen before, and because it is conspicuous and distributed into millions of pieces throughout a distributed ledger, blockchains are practically impossible to hack, there simply is no single point of failure. Business owners will not need to be coders to enjoy the benefits, as technology such as middleware will act like APIs and essentially link ERPs to whatever blockchains are joined. One could argue that the only task for a business owner is to “join” different blockchains. Of course, there are prerequisites to such a “joining.” SMBs will need to work with their IT leadership members and likely a blockchain as a service (BaaS) provider over the next several years to prepare. Other accelerators for the blockchain experience will include tagging assets with RIFD technology and a fully functional Internet of Things (IoT) environment to facilitate coordination of a business’s assets and equipment to plug in to blockchains.

As blockchain technology matures, the more immediate benefits will be cost savings due to disintermediation. As time goes on, benefits will be reaped through higher value proposition. Here are some of the more salient benefits to small/medium sized businesses:

  1. Supply chain: Your larger customers will soon be asking you to digitally verify the entire history of every product that leaves your shop, for good reason. This means you would have to join blockchain networks of supply chains that traverse through your business. Since the technology is ready, it will be easier than imaginable, and will shore up the quality of not only products, but also will be a godsend for recalls, if God forbid, they must occur. Blockchain will also allow SMBs to enhance pricing of products, as the cradle-to-grave tracking will unveil perfect information as to a product’s true value. The transparency will also expose “corner cutters” and fraudsters in your chain, which, along with reduced paperwork costs, will increase your bottom line (and might even cut your insurance premiums due to this “new” quality control visibility). And because cradle-to-grave activity will be transparent to all in the chain, lots of “checking and rechecking” and redundant inspection costs will be eliminated. We humans will continue to make errors throughout the supply chain but imagine the value of knowing in real-time an error has been made instead of 3-weeks and four steps later in the supply chain.
  2. Financing: Through the use of Smart Contracts (a product of the blockchain), financial lenders will be able to lend faster and more accurately for inventory as it ebbs and flows. Smart Contracts essentially follow a set of contract rules (if, then) and once all requirements are satisfied within the Smart Contract, a certain remuneration occurs, and the contract is settled. No middlemen involved, just two or more parties satisfying the requirements of their agreements and an automatic settlement and closing out at the end. Smart contracts can be used for vendor/supplier contracts, leases, insurance payouts and even real estate transfers.
  3. Cybersecurity: Because blockchains are distributed, there is no single point to breach anymore, potentially rendering hacking obsolete.
  4. Financial transactions: With the rise of blockchain-powered cryptocurrency exchanges, such platforms can be used by businesses in the future to secure monetary (or cryptocurrency) transactions B2B.

Ok, we’ve talked about a few of the perks. What are the downsides?

  1. It’s going to take a while until it becomes mainstream. For blockchains to work well, every party in the “chain” needs to be technologically able and ready to “sign up” for the chains, and the public chains will need some sort of format standardization. These factors, plus deciding who if any will “lead” certain blockchains will take time (it’s an awkward topic because blockchains are supposed to be distributed with no central authority, but we might find some sort of referee will be necessary here and there).
  2. Whilst data is super safe and immutable once within the blockchain, there is still the “garbage in/garbage out” problem of whether the inputs can be verifiable, so fraud and error can still be inherent.
  3. Energy costs and slow processing: Everything comes at a cost. The complexity of the algorithmic cryptography which keeps the blockchain pristine and safe requires extensive electricity and at times processing speed can lag expectations.

It’s time for SMBs to start having the conversation about blockchain. Since SMBs bear the brunt of many of our world’s data breaches, fraud, and other parties’ errors, blockchain technology could very well become the best friend of SMBs. Blockchain will allow SMBs to show the world their real value, free of tarnishing from bad actors in the ecosystem. There will be upfront costs to adopt, and while SMBs should be wary of being on the bleeding edge of blockchain, a SMB does not want to be so late to the game that it gets locked out of supply chains due to archaism. Apple Growth Partners is here to help start and facilitate this conversation about how blockchain can propel your business to its next levels and beyond. If you would like further information, please contact Chuck Mullen (author) at, or advisory principal Brandon Fredericks at