98% of small businesses in the USA use AI. How are they using it? Can it drive growth for yours?

AI is no longer a strange phenomenon in business today, even for small companies. In fact, a recent survey by the US Chamber of Commerce revealed that 98% of small businesses here in the United States already employ at least one technology platform enabled by AI.

That number is impressive since it reveals that AI has now become a significant influencing factor for small businesses. This survey further indicated that nearly 40% of such firms now make use of generative AI tools, a figure which almost doubled from last year’s level of 23%.

The generative AI tools are unique because they allow businesses to generate new content-writer-related work, be it for writing, design, or even coding. This simply means that small businesses are using AI not just for these very trivial functions but to create, innovate, and finally compete more effectively.

The number of businesses that use AI as proof of the level of its need in a competitive world like this speaks for itself. Even small businesses with limited resources compared to large companies can still make use of AI to improve and grow their operations.

How AI Helps Small Businesses?

AI Changes the Functioning of Small Businesses. AI allows small businesses to do things that earlier could only be done by big firms.

As per Jordan Crenshaw, Senior Vice President of the US Chamber’s Technology Engagement Center, AI helps small businesses “punch above their weight”. This means that small businesses can compete at a much larger scale because AI increases efficiency and productivity.

The survey shows that 91% of small businesses using AI believe it will help their business grow in the future. This is significant because it proves that businesses take AI as a growth catalyst. Also, 81% of small businesses intend to increase their use of technology platforms. These businesses realise and understand that making more use of technology, especially AI, can help them grow faster and achieve whatever objective they have.

AI is used in various areas of business to provide customer services, marketing, accountancy, and manage operations. AI, therefore, saves time, reduces costs, and makes decisions that prove better than a human would have made in the same amount of time it took for the AI to analyse the data.

Advantages of AI for Small Businesses

Small businesses can benefit from AI by automating things that would otherwise be time-consuming. That is, most business tasks can now be automated using AI, for instance, answering questions from customers, processing data, or managing stock. That would save the employees’ time for more important operations.

For example, with AI with tools like chatbots, a customer can seek information anytime. This will ensure that a customer receives help when they want it and enhances their experience in general. AI can also make business companies offer recommendations tailor-made for the customers based on individual preferences.

AI can help process large amounts of data within a short time and make businesses make more informed decisions. For example, AI can enable the prediction of demand for products, optimal pricing, and understanding customer behaviour.

AI tools help companies optimise inventory by predicting the demand pattern from historical data, reducing waste, and improving cash flow.

Companies use AI tools for logistics planning and route optimisation, among other uses, in order to minimise operations costs and lead times.

In this regard, financial institutions can use AI algorithms to detect patterns of unusual transactions that may be sending off suspicious signals. This, in turn, adds security to the institution. Additionally, the models are applied in techniques of credit scoring and risk assessment to make lenders more effective and informed in their deals.

These sites screen resumes, using set criteria, to sift out the people who are actually good fits for an organisation and make hiring processes much easier. AI-based tools can also monitor employee sentiment and level of engagement, allowing HR departments to implement various initiatives that improve a workplace culture.

AI saves a business time in hours associated with manual labour; thus, a business spends less money since fewer tasks require human input. AI makes fewer mistakes, which means fewer errors and consequently costs.

Challenges AI Adoption Might Pose

Although AI brings various advantages to small businesses, AI technology will present several challenges that small businesses will have to face. Since AI replaces certain jobs, the risk is that some people might lose their jobs. For instance, if a firm uses AI to automate customer service, it may not need to hire as many customer service representatives as before. 

However, according to experts, AI is never going to fully replace human employment entirely. It will instead change the nature of work, but it certainly will change the work stock. Workers have to upgrade their skills to fit and perform with AI.

For some small businesses, the price of AI is too high. Although AI can save money in the long run, its setup or cost for purchasing AI tools for short-run setup can be expensive. Small businesses also have to spend money on various employee trainings that will help them make the most out of AI.

AI functions on data; hence, companies must be sensitive enough to preserve the personal data of their clients. A company that fails to deal with data appropriately could land on legal issues and lose the trust that it has gained. 

AI is only as good as the data it is trained on. If AI systems are trained on biased or incomplete data, they may make unfairly discriminatory decisions. This issue is even more pertinent in hiring, where AI would unknowingly discriminate against certain people.

AI in Various Industries

AI is being used in a multitude of industries that assist businesses in improving their operations and providing services of better quality.

For example, AI allows retailers to monitor their stock much better by predicting what products will be sold and at what time. Moreover, AI can recommend to a retailer what likely products a customer would buy by suggesting a customer’s interest in different kinds of products.

For example, some types of products frequently purchased by customers. Then, AI can analyse such patterns and recommend to the customer similar kinds of items she would like. This gives better experience to the customer, although sales increase.

AI has been used in health care to enhance patient care. The AI can aid doctors in detecting diseases from medical images in good time. The use of AI also helps manage proper patient records and avails personal treatment. In addition, AI is used in telemedicine where doctors can diagnose and treat patients from their location.

Today, the finance industry applies AI in detecting fraud and risks. An example is that AI can scan transaction data in order to track any unusual activity that may be regarded as fraudulent. AI further helps customers manage their finances in light of individualised advice about their spending.

AI is the application of better production processes and decreasing downtime in manufacturing. AI predicts when machines require maintenance, which prevents loss in businesses through costly breakdowns. Another use of AI is in optimising supply chains so that materials and products arrive on time.

The Global Perspective on AI Adoption

While America leads in the adoption of AI among smaller enterprises, most other countries are also slowly opening their eyes to the potential benefits available through AI. There has been a large increase in AI investments across Europe and the Asia-Pacific region. Such regions are now starting to apply AI technologies in various sectors, from retail to health care, as is witnessed in the US.

Other countries, such as India, are also focusing on the digital transformation and application of AI. The Indian government encourages business entities, especially small businesses to adopt AI and other technologies that are advanced in nature, thereby making themselves competitive in the market. AI is going to change businesses around the globe, making them more efficient, innovative, and successful.

What Other Countries Should Do?

The emergence of AI has, thus, become a challenge to nations as they need to be able to leverage the use of this technology. It requires education and training that are capable of collaborating with AI. Thus, investing in digital literacy allows nations to prepare their workforce in preparation for future change.

Those options can be served by providing grants, loans, or tax incentives to small businesses who intend to hire AI. Governments encourage the economy to grow by supporting small businesses.

Knowledge and resource exchange can take place between tech companies and small businesses. Collaboration platforms involving such partnerships can be initiated by the government.

Is AI Good for Business?

Well, the bottom line is that AI promises to be a magical for small business owners and will also help businesses become efficient, make better decisions, and improve the customer experience.

However, definitely, there are challenges, and business must address them as they adopt AI.

AI isn’t a one-size-fits-all solution. Businesses will apply AI in different forms, depending on their specific needs. However, for most businesses, the benefits far outweigh the challenges, and thus, it will be increasingly valuable to add to any business, big or small.

Small businesses and big businesses alike is where AI has been really adopted, with nearly all businesses using some form of AI technology. AI can benefit a firm in many ways, such as by making it more efficient, improving customer service, enhancing decision-making, and making it become profitable.

However, with such benefits come the drawbacks of job displacement and ethical implications. In this sense, AI will have an even greater role in the success of small businesses to better compete within an increasingly digital world.

Other countries can follow the lead of the US, where investment in AI will positively complement the development of small enterprises through this technology. It will take its economy as one of the major economic powers worldwide and ensure its business stays ahead in competition all over the world. AI is a strong tool that can utilise innovation and business growth anywhere.