What are the benefits of AI for small businesses?

We help you understand how AI can help your small business grow.

Artificial Intelligence (AI) can be used by small businesses to help them grow, become more efficient, and remain competitive in their market. In this guide, we'll take you through how AI can transform small business operations. We'll cover the best AI tools for small businesses, unpack what exactly AI means, and demonstrate how small business owners can use it to achieve their personal business goals.

Small businesses can often be constrained by limited resources, and knowing where to begin and how to integrate AI can seem like a daunting task. This guide will take you through various aspects of AI, including its applications in marketing, customer service, finance and more. From chatbots and analytics tools, to automative processes and personalised customer experiences – we'll take you through the best AI applications that can transform a small business.

What is AI?

Artificial Intelligence (AI) refers to computer systems that can perform tasks that typically require human brains and skills. AI gives a computer the ability to learn from data, understand information, make decisions, and solve problems – all by itself. This means that it can help computers to adapt to situations and tasks that would normally be associated with and performed by humans.

Machines are getting smarter and smarter, and they can learn from data and patterns to make predictions. AI is a computer's ability to perform what we would perceive to be cognitive functions, such as reasoning, learning, problem solving, answering questions, and being creative. It's likely that many people have interacted with AI at some point in their lives – using voice assistants like Siri or Alexa on their phones or smart speakers, or interacting with chatbots to get customer service from a retailer.

There are many ways in which AI can be used to help a small business. These include market research, creating personas, customer research, and getting a better understanding of a market.

What is generative AI?

Generative AI tools, like language model chatbot ChatGPT and art generator DALL-E, generate content or art in response to prompts, changing how jobs are performed and the time they take to do them. A prompt is the instructions given to the AI by a person. For instance, generative AI tools like ChatGPT can create copy for a specific use based on the user's questions or prompts, and can make changes based on user critique to make the content more fit for purpose. Any company that needs draft copy created quickly can benefit from using a generative AI like ChatGPT to create materials and save time on resources.

What is machine learning?

Machine learning is a subset of AI that gives computers the power to learn from data and improve their performance on specific tasks over time. They can then perform this learning process without being programmed. It's like teaching a computer to recognise patterns and make predictions based on that they've learned.

There are two kinds of machine learning – supervised and unsupervised. In supervised learning, the algorithm learns from labelled data, making predictions or classifications. When filtering spam emails from an inbox, for example, a computer learns to differentiate spam from legitimate emails based on labelled examples. Unsupervised learning, on the other hand, works with unlabelled data to identify patterns or similar data points in data groups. For instance, an algorithm can group customers together based on their purchase behaviours.

How to use AI to support a small business

Using generative AI tools in a small business can get tasks done more quickly, saving time and money. Generative AI creates content in response to a brief given by a person (known as a prompt). This prompt can be altered multiple times to get the desired response from the AI. By relying more on generative AI, small business owners can spend more time on the important areas of their business rather than time-consuming repetitive tasks. According to an April Business Insights and Conditions Survey from the Office for National Statistics, only 16% of businesses across the UK are currently using at least one type of AI technology. Here's how AI can be used in a small business.

Conduct market research
All businesses should be conducting effective market research, and using AI can make the research process easier. Using a natural language processing tool that's driven by AI, such as Google Bard, or ChatGPT, business owners can ask questions about their market and business sector, and receive analysis from AI. Rather than spending lots of time scouring the internet, a business owner can use AI to gather data and compile reports, giving them industry-specific knowledge and insight. Check out these other 50 ways you can use ChatGPT.

AI tools enable business owners to improve and/or access other skills that they may not have thought would be possible or within reach. Using AI can really help businesses that are in their infant stages, as they may not have the funds or resources to hire extra staff with certain skill sets.

For example, if a business owner wants to craft a pitch deck for a potential client, but doesn't have the resources or funding to hire a professional writer or business development consultant, they can use an AI like ChatGPT to create initial drafts of speeches or presentation notes which can then be revised and edited. AI tools like Gamma App can also help business owners to present ideas to other people and create impactful slides.

Improve customer service
Some AI tools are revolutionising the way small businesses interact with their customers. They do more than automating particular moments in the customer journey – they personalise the shopping experience.

Also known as virtual assistants, chatbots are a common tool for businesses to help them direct customers to certain parts of a website, or to answer frequently asked questions. Chatbots are programmed to recognise common phrases and respond to them. Owners of start-ups or smaller companies can use AI to gain insights from customer feedback online, or to craft responses to common questions on their website. This can lead to better customer ratings for services received, as enquiries are responded to promptly.

Content creation
Adobe Firefly, ChatGPT and Pictory (among others) are all useful AI tools that small businesses can use to create engaging content. Good quality content creation can help a brand establish its authority in its sector, engage new and current audiences and boost traffic to a website. AI can be used to create product descriptions, website content and blogs, videos and imagery, logos, and branding, and so much more.

Improve efficiency
By automating mundane processes with AI, small business owners can focus on the more critical aspects of running and growing a company. AI can automate payments, take care of creative tasks, provide predictive analytics, forecast future trends, assess data, provide reports and lots more, to keep productivity levels high while giving business owners more time to focus on other areas.

The limitations of AI

It's still important to remember that using AI revolves around predictions and patterns that it's learned from its training data. AI isn't 100% reliable, and detailed prompt writing often determines the quality of its response. ChatGPT, for example, generates responses based on the patterns it has learned from its training data, and it may not always provide completely accurate or unbiased information. Therefore, it's essential to critically evaluate the responses received.

The data AI collects isn't necessarily fact-checked either. AI language tools can be lacking in up-to-date information, or may give inaccurate results. There's also the potential for AI models to create biases based on the data they were trained on. This is worth keeping in mind when using some AI tools to generate original content. Check out Vodafone's guide to the pros and and cons of ChatGPT here.

Want to learn more about AI for your business? Have a chat with one of our friendly V-Hub Digital Advisers.

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