AI for Small Business: Applications, Myths, and Adoption

When talking about AI, we usually imply that it will be used on a grandiose scale — saving lives with AI-assisted surgical tools, predicting historic events, driving autonomous cars, and what have you. In a corporate realm, business leaders are all over it and artificial intelligence consulting is in demand like never before. Not only does it help enhance a multitude of business processes but it also serves as a great tool to win customer loyalty and solidify competitive supremacy.


But what about smaller businesses or startups? Can they use this emerging, often confusing technology that even large corporations sometimes fail to implement correctly? Let’s explore the most potent use cases of AI for small business and how it can help increase efficiency, enhance employee experience, improve sales, and make better business decisions overall.

Powering Customer Relationships

Customer relationship management platforms are essential for businesses of any size. Tracking interactions with every customer via phone, email, or social media is a fundamental part of day-to-day service. Nowadays, customers expect businesses to know about them more than ever before. Providing personal recommendations based on previous interactions has become a standard of any B2C industry, and answering questions before customers ask them is what often separates thriving companies from the rest. As customers become more accustomed to all-permeating recommendations on media streaming platforms and online marketplaces, their expectations are rising, making businesses adjust their approach.

Automating Customer Communication

At the same time, we have thousands of much less sophisticated customer inquiries. For example, many customers tend to double-check a restaurant’s open hours even if they are clearly stated on the official website or social media. With the latest advancements in chatbot development, such questions can be easily answered without allocating human resources.

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Assisting HR

With the word ‘human’ at its core, paradoxically, HR is largely about data. Conventional HR tasks such as employee performance assessment or job applicants’ skillset evaluation come down to thorough analysis first and only then to decision making. AI can again reduce time spent on finding best-suited candidates by automatically wading through hundreds of applicants and prioritizing them based on a certain set of parameters.

Managing Cash Flow Intelligently

Thinking about starting your own small business? Consider that 20% of SMBs fail in their first year, and 50% fail in five years, according to the Bureau of Labor Statistics. While these figures don’t seem that aspiring, small businesses often make the same mistakes. The second most mentioned reason for failure among SMBs concerns cash flow. This area remains out of complete control for many business owners, resulting in detrimental mistakes like delaying a loan payment, failing to predict creditworthiness, and misunderstanding sales trends.

Gaining Competitive Advantage with AI

For a small business, a single competitive advantage can go a long way. Quite often, many rival businesses operate in the same niche with a very narrow target audience. Every customer can make a difference. With similar products or services, competitive advantage goes far beyond simple marketing strategies and price adjustments. The first step toward gaining a real competitive significance is doing a thorough competitor analysis.

Debunking AI Myths

Small businesses rarely explore non-conventional solutions like AI. The confusion AI causes is understandable. Not only this technology requires deep research to fully understand it, but it also remains mostly unexplored in many niches. Unless an area’s key player uses the new technology and continues to succeed, others become more willing to adopt.

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It’s Too Expensive

While often true for the corporate world and governmental organizations, AI adoption for small businesses costs significantly less. The costs of AI implementation among enterprises are comparatively astronomical as their business models often require regulatory compliance, carefully tailored software, specifically trained AI algorithms, management of sensitive information, and a dedicated development team on board.

It’s for Big Business

SMBs often hesitate to tap into AI, fearing they don’t have enough data. Your local skate shop has trillion times less data than Amazon, no doubt. However, the majority of SMBs don’t realize how much information they really have and that they don’t need the same amount of data as Amazon.

Data often remains idle and disorganized, scattered across different sources. This is why you need to thoroughly prepare for AI adoption by investing in data organization first. Moreover, keep in mind that ready-made AI solutions typically use cloud data scouted from other businesses in similar niches.

It’s Too Complicated

Yes, to squeeze the most value out of AI applications, it’s a must to sufficiently learn its basics. However, the hardest part about AI is developing the algorithms behind it, which has nothing to do with effectively using those tools. Most AI-powered software available on the market has user-friendly and well-thought-out UI. In most cases, complicated AI processes are happening behind the scenes. Software vendors that offer AI-enabled tools also tend to provide training materials along with it, which enables smooth user onboarding.