As a small business owner and content creator, artificial intelligence (AI) is on my radar. I use AI-enabled grammar and spelling programs daily, in small but meaningful ways. At a larger scale, solutions such as generative AI (GenAI) represent both potential benefits and risks — these tools, though great for brainstorming, can’t quite replace the human touch.
Many small businesses are in the same boat. A recent report by the United States Census Bureau1 found that small businesses had relatively high AI adoption rates through 2023 and 2024. Compare that to data from McKinsey,2 which shows that micro-, small-, and medium-sized businesses (SMBs) adopt AI at half the rate of large companies.
Put simply, while SMBs still aren’t sold on artificial intelligence, the tools’ ubiquity makes it tough (and expensive) to ignore the possibilities and impact of AI. Here’s how AI can help small businesses stay ahead of the curve.
Understanding AI for Small Businesses
AI tools, governed by machine-learning (ML) algorithms that grow smarter as they ingest and analyze more data, perform specific functions for SMBs. Chatbots are a common example of such smart AI for business use. The concept is straightforward: customers ask a question, then chatbots parse the context, retrieve relevant data, and provide an answer. Questions outside of chatbot expertise are forwarded to a live agent. Over time, chatbots “learn” which questions are most common and which answers are most effective, improving customer satisfaction.
Benefits of AI for Small Businesses
Implementing AI offers several benefits for small businesses, including:
Increased productivity and efficiency.
AI tools can help businesses quickly edit and perfect emails, blog content, and marketing campaigns. As a freelance writer, I use AI tools to polish my work and improve my messaging — it’s a small (but noticeable) boost to my productivity.
Enhanced customer experiences.
AI makes life easier for the customer. Beyond chatbots, intelligence tools can help customers quickly find the product they’re looking for, or create and send follow-up emails after a purchase.
Improved data analysis and insights.
AI-powered analysis tools can compare and contrast multiple data sets to discover new trends or pinpoint root causes. For example, an ecommerce business might use AI to assess website performance issues and suggest ways to resolve the problem.
Automated task completion.
AI also excels at task automation. Using AI, SMBs can quickly scan customer databases for duplicate entries or missing information.
Four Steps for Effective AI Implementation
Considering AI adoption but not sure where to start? Follow these four steps.
1) Assess your specific needs.
The rapid development of AI means a host of tools and technologies are now available to help small businesses. But not every business needs the same solutions. To maximize AI impact, start by evaluating your specific needs. For example, if customer call and email volumes are rising due to business expansion, you might consider chatbot adoption to improve response times.
2) Select your AI solution.
With your key requirements identified, next choose the AI tools that solve your particular problem. Research several options to compare and contrast price, performance, and features.
3) Train your employees.
Once you’ve selected a tool, bring employees on board. Give them a chance to explore how the AI works, what it can accomplish, and what it means for them.
4) Integrate AI.
Finally, integrate AI into your existing workflow. Best bet? Start small. Run a low-stakes trial; see how AI performs, make any needed adjustments, and try again. Once results match expectations, scale up.
AI in Action for Small Businesses
In theory, AI looks great. But how does it hold up in practice?
Consider New York-based restaurant chain Just Salad, which uses Google’s Gemini AI3 to summarize meetings and emails. This shortcut produces actionable items for staff, allowing them to focus on business objectives rather than skimming correspondence in search of key takeaways.
AI Challenges and Other Considerations
Cost may discourage some SMBs from AI adoption. If the price isn’t right for your business, you can minimize overspend by prioritizing return on investment (ROI). Consider a chatbot that costs $1,000 per month. If it also saves you $2,000 each month in overtime pay for employees handling large call volumes, it’s a win-win.
Privacy is another potential problem. Here, finding the right provider is a priority. Look for AI offerings that include robust support and clear security policies.
Finally, your business should expect some employee resistance to AI adoption, as workers fear that AI will replace human staff and/or require a shift from familiar processes to something new. Both issues can be addressed: show your staff how the solution works and let them experience the simplification of their daily tasks for themselves.
The Future of AI for Small Businesses
For SMBs, the future of AI is smaller — and smarter. As noted by the MIT Technology Review4, 2025 will see the rise of “small” language models. Unlike their large language model (LLM) counterparts, these solutions use tightly-focused datasets to deliver targeted insights. Small businesses can also expect generative models to get better at understanding context and taking intelligent action.
Making the Most of AI for Your SMB
Though AI offers substantial benefits for small businesses, there’s no one-size-fits-all approach. To make the most of AI, get specific and start small. Focus on solutions that streamline employee tasks and enhance ROI, and pace yourself. Just like AI, your business evolves over time — slow and steady wins this race.
- https://www.census.gov/newsroom/blogs/research-matters/2024/12/ai-use-small-businesses.html ↩︎
- https://www.mckinsey.com/mgi/our-research/a-microscope-on-small-businesses-spotting-opportunities-to-boost-productivity ↩︎
- https://cloud.google.com/transform/101-real-world-generative-ai-use-cases-from-industry-leaders ↩︎
- https://www.technologyreview.com/2025/01/08/1109188/whats-next-for-ai-in-2025/ ↩︎