Q: What are the key benefits of AI for small businesses?
A: AI offers increased efficiency, improved customer service, and enhanced decision-making by automating tasks, providing 24/7 support, and analyzing data for insights.
Artificial intelligence (AI) is one of the biggest and most widespread digital transformations of the past decade. Its impact is felt across industries and fields, influencing changes that rewire the operations of small and large businesses and organizations.
These transformations, without a doubt, come with lots of controversies.
One side of the debate argues that AI is here to take the jobs of the average Joe and Jane. The other side argues that AI is here to make work easier for everyone through automation.
And the truth?
Well, you find that at the center of the debate, which is also where you will find balance.
According to the World Economic Forum (WEF), AI will displace 85 million jobs in the near future. However, it will also balance things up with 97 million new jobs.
When it comes to AI for small businesses, the conversation is pretty one-directional. There are too many AI benefits for SMEs, so it is hard to argue that the technology is displacing small businesses.
In fact, as of 2023, a report released by the Small Business and Entrepreneurship Council (SBEC) showed that 48% of small businesses started using AI in 2022.
Of the businesses using small business AI tools, 93% report that it offers cost-effective solutions that improve profitability and drive savings.
Experts reckon that small businesses are saving hundreds of billions of dollars annually with AI.
In the past two years, AI has proven to be of extraordinary importance for small businesses. It is only right that those yet to adopt AI across relevant operations do so and get a bite of the transformational improvements and competitiveness it bestows on those who successfully implement it.
From automation to financial management, there are many benefits to reap from AI software for small businesses.
Since you are here, you probably want to know more about AI for small businesses. Thankfully, we are all about helping you get ahead!
In this post, we’ve provided extensive insights into the following:
- The key benefits of artificial intelligence in business
- Practical AI applications for small businesses
- The future of AI in business and how you can prepare for it
Key Benefits of AI for Small Businesses
As you would expect, the application and need for AI varies across industries. Hence, many business owners are yet to figure out how to meaningfully apply AI solutions to boost their productivity and profits.
The benefits addressed below tread across the common grounds of effective AI application across small businesses, irrespective of industry. Hopefully, you will gain insights on how you can apply AI and benefit from it.
Increased Efficiency
AI’s existence borders on learning. Essentially, the technology continuously picks up and processes new knowledge to ensure it has enough resources in its database to provide human-like outputs when consulted.
This characteristic feature of AI tools feeds its top selling point: automation.
Small businesses can train AI tools with their data and configure them to provide automatic responses to queries in line with set conditions and protocols.
As a result, businesses can automate repetitive tasks, such as
- Accounting
- Basic customer interactions
- Data collection and analysis
- Data entry
- Price quoting
- Scheduling
Besides those listed above, are there operations you think would be a huge relief if you could automate them? There’s a good chance that if you check, you’ll find AI tools that automate some or all of the operations.
Small businesses are using AI tools to automate some of their repetitive mundane tasks, freeing up employees to focus on higher-value activities.
Additionally, AI applications for small businesses are helpful for identifying patterns that most business leaders would ordinarily miss.
As AI solutions free up more time for employees to work on business-critical operations, they are also equipped with helpful insights that ensure better outcomes.
Ultimately, businesses experience overall productivity and efficiency across their operations.
Improved Customer Service
Attracting and retaining new customers is the biggest challenge that most small businesses face. Thankfully, many AI solutions aim to solve this challenge—and have been doing so successfully.
AI Chatbots and Virtual Assistants
The ubiquity of AI virtual assistants and chatbots bears witness to the effectiveness of AI for small business customer service.
These solutions can provide human-like customer support 24/7, handle common inquiries, and resolve issues quickly, enhancing customer satisfaction.
AI chatbots and virtual assistants are basically customer support agents that are always learning in an attempt to get better while never skipping a minute of work—during and outside office hours.
Here’s an interesting fact:
Despite AI being in what could be considered early stages of development, people are already finding it difficult to tell the difference between AI-generated content and those generated by humans.
This phenomenon is evident across many industries, especially the creative industry and customer service industry.
The BrightLocal Local Consumer Review Survey 2024 indicated that when shown the response provided by a business owner and an AI chatbot to review, most respondents were unable to tell which one was genuine. In fact, 58% of the respondents preferred the AI-generated response.
AI chatbots and virtual assistants pose immense opportunities for business owners. However, they are not all that AI has to offer in the customer service industry.
AI-Integrated CRMs
Customer relationship management (CRM) systems have also witnessed exceptional transformation in the past two years, thanks to AI integration.
AI-integrated CRMs use a process called clusterization to store and predict information by using algorithms to identify patterns and behaviors through customer segmentation, according to Forbes.
Furthermore, business owners use AI solutions to automate their CRM systems to automatically update customer information with more precision and depth than was ordinarily and manually possible.
And there’s more!
AI-Powered Call Answering Services
It might sound futuristic, but the reality is around the corner: AI-powered call-answering services can attend to your customers over the phone with accurate, human-like responses.
The technology for this is still pretty new, but the possibilities are seemingly endless. Soon, your customers might not be able to tell if they are talking to a human or AI and might even unknowingly prefer AI interactions—as we saw with BrightLocal’s customer reviews survey.
Check out this post on AI-powered call-answering services to learn more about how you can transform your call-answering.
Enhanced Decision Making
Just as AI solutions can collect and store more extensive customer information across multiple channels, they can also effortlessly analyze vast amounts of data in record time.
What’s more interesting is that AI outputs a more detailed breakdown of trends and patterns in raw data, all visualized in an interface that is easy to understand and navigate.
This equips business owners and team leads with meaningful metrics, insights, and recommendations that enrich their decision-making processes.
Practical Applications of AI in Small Businesses
For all the many AI benefits for SMEs that one could think of, business leaders still face difficulties determining what part of their operations could benefit from small business AI tools. Even when that’s sorted, the challenge of effective implementation still lurks.
If AI-driven business growth is one of your goals, you should consider the following applications of AI for small businesses.
Marketing Automation
If you’ve been in business for a while, you may have noticed that acquiring new customers and retaining old ones are not the easiest things to do. As a result, business leaders channel lots of efforts towards marketing and customer service.
So, it’s no surprise that when it comes to integrating artificial intelligence in business, business owners mostly choose to start with marketing.
Business leaders and marketers use AI to automate certain tasks, such as but not limited to:
- Multi-step campaigns: There are AI tools that help in segmenting customer data to create user journeys for different customer types. They can also be used to automatically create multi-step campaigns that target specific customer segments.
- Scheduling: Sending pre-scheduled campaigns across social media, email, and other channels to target customers at their preferred time.
- Social listening: Initiating a social media listening protocol, which enables given AI tools to automatically detect and assess mentions and conversations about your brand or relevant topics, notifying you through automatic alerts.
- Programmed campaigns: Real-time AI-driven data analysis helps marketers determine the effects of their advertising on different audiences and adjust their strategies to better fit and improve relevancy to those audiences.
Overall, AI in marketing automation can personalize marketing campaigns, optimize ad targeting, and analyze customer behavior to improve marketing effectiveness.
Also noteworthy is the fact that AI can detect changes and new trends in customer behaviors or patterns in real time. This helps business owners quickly refine their marketing strategies and capture new customer interests, enhancing business agility and scalability.
Customer Support
Here, you should mostly think of AI chatbots and virtual assistants.
Take it one step further and think of them as tools for boosting overall customer experience—without limit to just chatting or interacting with customers.
With AI in customer service, most business owners, entrepreneurs, and marketers often have a limited perspective of AI as a tool for chatting with customers. Unfortunately, this means they don’t get to leverage AI to revolutionize the entirety of their customer service operations.
Fundamentally, AI chatbots and virtual assistants are usually embedded across multiple channels, such as website customer support, brand profiles on review platforms, and social media profiles to address customer inquiries.
These bots provide visitors and customers with appropriate answers, solutions, and guidance to their inquiries and issues around the clock. They ensure customers always get a positive experience—or, at the very least, helpful responses.
In essence, AI chatbots and virtual assistants can handle customer inquiries, provide instant responses, and escalate complex issues to human agents when necessary.
Furthermore, these and similar AI tools are also effective for:
- Text analytics: Besides direct customer interactions, some AI chatbots and virtual assistants have the capability to read and analyze any text that affects the company, including comments and reviews. These AI tools can provide the result of the analysis in well-detailed reports, helping with insights and recommendations that guide marketing teams to streamline their efforts.
- Tracking user activities: Some AI bots provide return customers with appropriate guidance and references because they have historical data on the given customer’s patterns. Additionally, they can monitor and analyze the customer’s activity as they interact with different web pages on your website.
These functions add to the overall enhancement of customer support and equip business owners with more control and understanding of their audience and customer base. They position owners to personalize and streamline customers’ experiences and transform their customer management system.
Operations Management
There are many ways that small businesses can use AI to bolster their operations.
AI can streamline inventory management, predict demand, and optimize supply chain processes, leading to more efficient operations.
It’s left to the business owner to assess their operations and determine where they need AI the most while considering criticality, budget, and ROI.
AI for Small Business Supply Chain and Inventory Management
There are various AI applications for small businesses that are designed to make supply chain and inventory management more efficient and profitable.
All thanks to AI being able to assess large amounts of current and historical data, patterns, and trends to:
- Predict potential revenues and revenue streams, giving you opportunities to rethink your strategies and adopt pricing and inventory management practices that enhance business resilience.
- Predict the sales performance of specific services and products, making your business better prepared to handle demands.
- Provide insights on supplier and vendor performance, ensuring you are always optimally stocked (not overstocked or understocked).
- Optimize routes to minimize delivery times and cut down shipping costs.
Some small businesses have also been able to use customized AI software for small businesses to predict appropriate maintenance schedules for equipment parts, minimizing downtime and enhancing smoother operations.
Future Trends in AI for Small Businesses
It’s inarguable that the future of AI in business is founded on solid grounds and promises to be more substantially progressive.
AI is one of those small business technology trends that simply won’t fade away.
There’s an overwhelming agreement from small business owners that AI has been very influential in their business’ success in recent years.
So, it makes sense that the use of artificial intelligence in small businesses is becoming more widespread.
That said, many more AI-driven innovations are making their way to the mainstream.
For context, there’s a continued rise in the use of AI in:
- Product development: Engineering teams are using AI to improve process efficiency, with a focus on task automation, prototype testing, new design proposals, material options analysis, and making recommendations based on development KPIs. Basically, AI is applied for product development insights, strategy, and design.
- Service delivery: AI is playing a vital role in helping small businesses transform various elements of their sustenance, including infrastructure and operations. It’s also helpful for overcoming skills and labor shortages by automating mundane tasks, predicting maintenance schedules, and supporting customer service. Such impact can be seen in how AI is revolutionizing call answering services. As a result, small businesses have more efficient service delivery systems and can cut downtimes by up to 300%.
- Business modeling: Forward-thinking small businesses are adopting AI-driven systems to tweak their approach across all operations to make them more formidable operators and competitors in the modern business landscape. This AI-driven approach to modern business is incontestably reshaping traditional business models and operations, arming small business owners with potentially future-proofed processes and avenues for growth. The result is the emergence of new business models with pay-per-use services, subscription models, and outcome-based pricing models, all driven by AI innovations.
While these contexts are realities for a lot of small businesses, some AI-driven innovations are still in the works and form a prominent basis for the future of AI for small businesses. These innovations are found in machine learning and cybersecurity.
AI and Machine Learning
AI is already playing a huge role in content generation, predictive analytics, and personalized customer experiences for small businesses; the outcomes are sometimes tainted by elements that can be likened to false positives.
Hence, there is a significant demand for more accuracy in AI applications for small businesses. In response, key players in AI development are pooling resources to improve the integration of contextual reasoning in AI tools.
Sophisticated machine learning algorithms are being fed with more nuanced volumes of data on market trends and consumer behaviors. These algorithms can model complex conditions and pathways to addressing them, enabling AI-based business operations to adapt dynamically to problems.
They can analyze these data to identify correlations, patterns, and anomalies, further enabling them to make more accurate forecasts.
What does this mean for small businesses?
Well, with more super-accurate responses and valid predictions, small businesses can take more confident steps with their strategies, backed by the assurance that they are on the right track.
Business owners can develop more marketable services and products with long-term relevance and profitability. Customer experiences can even be more personalized than we are already witnessing in today’s AI-based customer support systems.
AI in Cybersecurity
If your business is handling any form of consumer or business-critical data, there is a chance that you are at risk of cyber threats.
Although cybersecurity systems already exist for small businesses, they are often reactive to unconventional cyberattacks. Those powered by AI are potentially more equipped to provide proactive protection and response to advanced or evolving threats.
How so?
As mentioned earlier, AI can analyze volumes of data to detect patterns, correlations, and anomalies. It can use the derived information to make business operations and systems—in this case, cybersecurity systems—agile and resilient.
This functionality is also applicable across other small business operations, including accounting, inventory, website and social media processes, and databases.
As AI evolves to be more accurate, the ability to detect anomalies in cyberthreat-prone business operations becomes more refined and proactive.
Imagine having a security system that masters and adapts to old and new malware, spear phishing, and DDoS attacks 24/7, across your databases, websites, and accounting tools. This ensures you never suffer data loss and unnecessary downtimes, which are recipes for losing customers’ trust and patronage.
That’s the future of AI-driven cybersecurity applications in small businesses.
For all the controversies surrounding AI, it has largely remained a gift that keeps on giving. The benefits are astounding, and because AI is intuitive, there is no limit to what you can do with AI tools.
Conclusion:
It’s also a bit overwhelming to imagine what the future of AI in small business technology trends holds in store for small and medium-scale businesses.
In the current climate, business owners can already use AI to do a lot more for a lot less, freeing up more time for small business managers and employees to focus on business-critical initiatives that AI can’t handle—thus guaranteeing business stability, productivity, relevance, effectiveness, and competitiveness.
Further Reading:
- Technologies Powering Virtual Office Spaces
- Empowering Independence: A Guide for the Modern Independent Business Owner
- Maximizing Customer Value: A Guide to Customer Retention Analysis
- Green Marketing Definition: What It Is and How It Works
As much as people fear that AI will displace humans in the workplace, using AI for small businesses has largely proven to be effective in augmenting human intelligence and capabilities, strengthening the ability of small business owners to effortlessly control business data and processes.
AI prepares you for the future while giving you a competitive edge that places you many steps ahead of your competition. It’s not something to fear; it’s something that you must embrace if you want to future-proof your business.
Still not sure where to start implementing AI in your small business?
Contact us today for a free consultation to learn more about how you can finetune your business with AI solutions and tools available through Alliance Virtual Offices.
