How Small Businesses Can Use AI Tools

There Are Plenty of Options to Boost Efficiency and Productivity

Fact checked by Vikki Velasquez
Reviewed by JeFreda R. Brown

Artificial intelligence (AI) tools promise many benefits for small businesses, including increased efficiency, cost savings, better customer service, and growth opportunities.

These applications can help a small business owner automate business processes for greater efficiency, and analyze information for better planning. Others can enhance communication with customers.

Better yet, some of these tools, like ChatGPT and Google Docs, are free.

According to the Small Business and Entrepreneurship Council’s 2023 Small Business AI Adoption Survey, 83% of small business owners plan to use AI in the next year.

Key Takeaways

• Small businesses can use AI tools to assist in accounting, customer service, marketing, security, and recruitment.
• To smoothly implement AI, identify areas that need improvement, select the right tools, and train employees on their proper use.
• Don’t overlook the need to capture the information that AI is providing and incorporate the benefits into your business.

AI Tools to Consider

Choosing the right artificial intelligence tool from the many that are available will come down to the requirements of the small business and its day-to-day activities. Here is an overview of some of the applications and business areas that AI tools can support.

Accounting

AI can make accounting processes more efficient, offering categorization recommendations for transactions based on historical data.

Some AI tools can assist with data analysis for cash flow forecasting, accounts payable, and accounts receivable processing. They can even catch errors or irregularities in transaction data that indicate possible fraud or security risks.

Chatbots

A chatbot is an app that simulates human conversation through text or voice interactions. Added to a company website, it can field common questions and requests from customers.

That frees up the team to address more complex issues and extends customer service coverage to 24 hours.

Many chatbots also learn as they capture data, and can be connected to customer relationship management (CRM) software to integrate information on customer interactions.

Siri Is AI

Apple’s virtual assistant Siri is an example of AI. Siri uses machine learning, natural language processing, and voice recognition to respond to users.

Customer Relationship Management (CRM)

AI-enabled CRM software can help drive sales or identify marketing opportunities based on its learnings from customer behavior and data. For example, it can offer incentives based on a customer’s order value and frequency.

It can also predict future customer behavior, providing suggestions and insights into trends.

Customer Service Automation

Chatbots are one way to automate customer service. Many phone systems use voice-enabled AI to answer questions and direct calls, while tools like voice search can be helpful to direct customer calls.

As with chatbots, tools like these can extend customer service center hours without the need to hire around-the-clock support.

Cybersecurity

Small business owners looking to protect their business and customer data can use AI-powered cybersecurity tools to scan for data irregularities or patterns of unusual activity and receive alert notifications.

Marketing and Advertising

Generative AI tools such as ChatGPT, Midjourney, and Adobe Firefly can help with content creation for marketing and advertising applications from blog posts to social media captions, graphics, and emails.

Tools like Grammarly can help review or edit the content. Other AI tools can be used to schedule, post, or send content, and track the performance of campaigns, tests, or posts according to set metrics.

Recruiting

Reviewing resumes is a time-consuming task, and AI-powered software can take some of the load off recruiting. AI-powered tools can screen resumes and applications, and narrow down the candidate pool.

Translation and Transcription

AI translation tools provide a quick and easy way to translate text into other languages.

AI recording and transcription tools can be used to capture meeting notes or record follow-up tasks.

Benefits of Using AI Tools for Small Businesses

Small businesses can gain many advantages by incorporating AI tools into their operations:

• Improved efficiency: AI can increase employee productivity by reducing time spent on rote or recurring tasks.
• Cost savings: AI software can alert you to potential threats or errors (such as duplicate payments) by identifying irregularities in data, saving money, and reducing risk.
• Enhanced customer experience: AI chatbots and automated customer interactions can reduce the volume of calls and queries, freeing your team to focus on more complex customer interactions. They also extend the hours that your business can offer customer service. AI can assist in personalizing content to offer customers a unique engagement with the brand.
• Increased growth opportunities: Many AI programs incorporate machine learning algorithms, which can offer a greater understanding of customer behavior via pattern recognition that improves over time. This can lead to better sales and revenue growth.
• Better decision-making: AI can provide and interpret analytics on large volumes of key business data to enhance problem-solving.

Best Practices for Implementing AI

To maximize the effectiveness of any AI tool, think of it like any other process or technology being introduced to the business. Here are some steps to consider:

1. Assess current processes. Identify areas or systems that could benefit from automation or increased efficiency through the use of an AI tool.
2. Do your research. It’s a crowded field. Comparative research on features and pricing can ensure you choose the right AI tool for the application and outcome. Check to make sure that the tool can be integrated with current systems and scaled according to the needs of the business as it grows.
3. Give your team a heads-up. Let any relevant team members know in advance that you’re introducing the tool, and answer any questions they may have.
4. Undergo and provide training. Ensure that anyone using the AI tool fully understands what it’s being used for and how to use it.
5. Monitor, maintain, and update. Keep the software maintained with any updates, and monitor its performance and usefulness.
6. Leverage insights or improvements. Understand how the tool plugs into the bigger picture of your business to ensure that you capture and incorporate the benefits it’s providing.
7. Continue to learn and adapt. Make time to reflect and solicit feedback on how the tool is working for the business and its employees, and take advantage of any machine learning capabilities that the tool can provide over time.

Challenges to Incorporating AI Tools

Small businesses need to take several factors into consideration when adopting AI tools. These include:

• Incorrect or inaccurate results: AI tools are limited by the amount or type of data they are trained on, and they can generate misleading or nonsensical results (referred to, aptly, as “hallucinations”). This is the case with many generative AI tools, whose outputs might need to be reviewed or fact-checked by a human to ensure their validity, relevance, and accuracy.
• Data privacy and security: The legal landscape around AI data privacy is still evolving. As AI models require data to train their algorithms, there are urgent concerns about the use and security of personal data. Any user of AI needs to stay alert to developments in this area.
• Bias and ethical considerations: Many AI models are designed to recognize patterns. They have been shown to reproduce existing patterns of discrimination. This was the case with an experimental AI recruiting software developed by Amazon. Trained on 10 years of resumes submitted to the company, it demonstrated significant bias against women, reflecting an existing gender gap in tech workers.
• Employee training: Because of the speed at which AI technology is evolving, it can be challenging to keep up with developments and changes and train employees accordingly.
• Potential job displacement: In 2023, Goldman Sachs predicted that AI could replace “the equivalent of 300 million full-time jobs,” replacing between a quarter and half of the workload of exposed occupations.

Future Trends in Small Business AI Tools

Advancements in AI tools hold many promising applications for small businesses.

The ability to increasingly personalize customer experiences by capitalizing on historical data, for instance, can offer small businesses a competitive edge.

As natural language processing models keep evolving, generative AI tools will become more powerful and more accurate. Tools are being developed to adapt this technology for more industries and specialized uses.

AI tools can also enable predictive analytics, providing valuable insights to decision-makers based on current and historical data. This can be particularly powerful in applications such as financial forecasting and inventory management.

What Are Some Free AI Tools for Small Businesses?

Many software suites are incorporating AI functionality. For example, Google Workspace Labs introduced AI-assisted capabilities to Google Docs, Sheets, and Slides.

Free tools like ChatGPT, Dall-E, Canva, and Grammarly can assist with content generation. Software like Fireflies and Otter can help with transcription and meeting notes.

How Can I Use an AI Chatbot in My Business?

Adding an AI chatbot to a business website can help address common customer inquiries, reducing the volume of calls or emails that staff members have to resolve.

Chatbots can also provide businesses with valuable insight about customer engagement and behavior.

Which AI Tools Are Best for Solo Entrepreneurs?

AI tools that offer automation or increased efficiency can be especially valuable for solo entrepreneurs with limited time and resources. Generative AI tools can assist with time-consuming or repetitive tasks such as writing captions or product descriptions. Recording technology can take meeting notes and provide call transcriptions. AI accounting tools can reduce the workload on those who can’t hire a dedicated bookkeeper.

The Bottom Line

AI tools can have a big impact on the success of a small business. However, it’s important to consider their uses thoughtfully and implement them well to capitalize on their benefits and guard against their drawbacks. In the wrong hands, AI can create issues in terms of privacy, security, accuracy, and bias.