Guide to AI for small business growth

AI for small businesses: Tools and strategies to drive efficiency and growth.

If you want to cut costs or save time, you should look to optimise your operations – and one powerful tool that's becoming increasingly indispensable for doing just that is Artificial Intelligence (AI). In this beginner's guide, we'll explore what AI for businesses means, how artificial intelligence is used for business, the pros and cons, and the top AI tools available that could elevate your business.

Introduction to AI for business

Many small businesses have their sights set on growth, whether that means increasing revenue, expanding the customer base or improving market presence, or all of the above. And usually, small businesses are juggling this growth with a small budget, looking for a way to expand in a sustainable way.

But achieving growth at scale can be challenging. Traditional methods often involve significant costs, from hiring additional staff to scaling up marketing efforts – a daunting prospect for small businesses.

That’s where artificial intelligence (AI) technology can be a game-changer. Artificial Intelligence is no longer a futuristic concept; it's here and it can significantly impact your business. Artificial intelligent assistants (or AI assistants for short) have been around for a while now. You’re probably familiar with assistants like Amazon’s Alexa and Apple’s Siri, and probably use them in your personal life. But is it something you should adopt at work, too? In this article, we’ll take a look at everything you need to know about AI assistants to help you make a decision.

AI encompasses a range of technologies that enable machines to mimic human cognitive functions, such as learning, problem-solving, and decision-making to improve efficiency, customer experiences, and more. AI can help small businesses to grow at scale by automating internal processes, enhancing customer experiences and improving their marketing efforts – without the need for investing in costly resources.

What is AI and Machine Learning?

Understanding the difference between AI and machine learning is crucial for being able to include them in your business. Here comes the science:

Artificial Intelligence (AI) means the simulation of human intelligence in machines that can perform tasks requiring human intelligence, like speech recognition, decision-making, and language understanding.

Machine Learning (ML) is a specific strand of AI that focuses on the development of algorithms and statistical models, allowing machines to learn from and make predictions or decisions based on data.

AI and ML are often used interchangeably, but there's a distinction: ML is a type of AI. AI is a broader term covering all projects that simulate or multiply human intelligence.

Who is using AI in the workplace?

AI is becoming increasingly popular, with Forbes finding that 68% of large companies, 33% of medium companies and 15% of small businesses have incorporated at least one AI technology.

Organisations are using AI for a wide range of tasks, including:

• Customer service (56%)

• Cyber security and fraud management (51%)

• Customer relationship management (46%)

• Digital personal assistants (47%)

• Inventory management (40%)

• Content production (35%)

• Product recommendations (33%)

• Accounting (30%)

• Supply chain operations (30%)

• Recruitment and talent sourcing (26%)

• Audience segmentation (24%)

What is an AI assistant?

AI assistants are digital tools or software that use artificial intelligence to help users perform a variety of daily tasks. But not all AI personal assistants are the same – there are several different types of assistants.

Alexa, Siri and Bixby are all examples of voice-activated AI assistants. They respond to voice commands – think of speaking to your Amazon Alexa or picking up your phone to ask Siri or Bixby a question.

Text-based AI assistants interact with users through written text. These types of assistants can take several guises, such as chatbots on websites, virtual assistants within mobile and web apps, and task management tools.

How does an AI assistant work?

AI assistants work through a combination of machine learning and natural language processing (NLP).

Machine learning is when a computer programme is trained to learn from a large amount of data and improve over time by identifying patterns and making decisions based on that data.

NLP enables the assistant to understand and respond to both written and spoken commands by analysing and interpreting the language used.

In a nutshell, these two technologies work together to help the AI assistant understand what you’re asking of it – and to ensure it gets better every time it helps with a query. This allows AI assistants to perform a variety of tasks that can help the user, including:

• Answering questions

• To-do lists

• Managing calendars

• Ordering products

• Setting reminders or alarms

• Sending messages and making calls

• Manage emails

• Set timers and alarms

• Play music and shows

• Dictating notes and documents

• Scheduling meetings

• Tracking deadlines

• Sending reminders
  

How can small businesses use AI?

Using AI in business can seem daunting, but there are so many AI uses in business and tools that are accessible and easy to use for a number of functions. Once you understand how to leverage AI as part of your business performance, you can start incorporating it across all areas of your business, from sales and lead generation, to onsite SEO and email marketing. Here are some ways businesses can use AI:

1. Customer insights and market research

Market research can be time consuming, and small businesses may not have the skills needed in-house to conduct in-depth research – or the budget to bring in external resources.

Use AI to analyse customer data and gain insights into customer behaviour and preferences. This can inform product development, marketing strategies, and personalise customer experiences.

AI assistants can save you time and effort by analysing market trends, looking into consumer behaviour and analysing the competitor landscape. Tools like Brandwatch use AI to analyse data at scale, saving your team time while providing strategic insights.

2. Chatbots and Virtual Assistants

AI-powered chatbots like Intercom can be used to provide on-demand customer support, ensuring customers are supported around the clock while freeing up human resources for more complex tasks. Use chatbots to handle simple customer support queries and virtual assistants for automating routine tasks, such as appointment scheduling or data entry.

Research by Intercom found that chatbots increased sales by 67%, improved customer response times by three and increased customer support satisfaction by 24%.

3. Marketing improvements and automation

Use AI for automating marketing tasks, such as email campaigns, content recommendations, and ad targeting to increase the efficiency of your marketing efforts.

• Content creation: AI tools like Microsoft Copilot allow small businesses to ideate and create content for blogs, social media, and other marketing channels. This ensures consistent and relevant messaging while saving time and resources.

• Social media scheduling: Even if you don’t use an AI assistant to write your social media captions, you can use one to schedule your posts in to ensure they go live at the right time, reducing the need for someone to be available at all hours to manually post on your social platforms. As well as generating captions using AI, SproutSocial uses the technology to determine what the best times are to post the content, based on when your audience is active and likely to engage with your posts.

• Design work: Businesses can also use AI tools to create visual content like logos, banners and social media graphics – again, helping to speed up the process while increasing the volume of marketing content produced.

• Data-driven insights: AI tools like Pendo can help you to analyse customer behaviour and predict future trends, meaning you could better optimise marketing campaigns, which can help you more effectively predict demand.

  
  

4. Predictive analytics for boosting sales

You can use AI to predict market trends, customer demands, and inventory requirements, aiding in better decision-making.

• Forecasting revenue: Use AI to predict sales based on historical data, market conditions, helping you to better plan ahead and capitalise on peak periods.

• Lead scoring: AI tools like Infer can score and prioritise leads based on their chances of converting, meaning sales teams can focus their efforts on the most promising prospects.
  
  

5. Fraud detection

Use AI algorithms to identify and prevent fraudulent activities, safeguarding your business and customer transactions.

6. Streamlining operations

Automate manual and repetitive tasks, such as data entry, inventory management, and invoicing, to improve operational efficiency.

• Automate routine tasks: Use AI assistants to automate routine tasks like scheduling meetings and generating reports – freeing up employee time to focus on more strategic tasks.

• Workflow automation: From processing customer orders to updating CRM systems, AI can reduce reliance on manual input to increase efficiency and productivity.

• More productive meetings: Tools like Microsoft Copilot can help you stay on track in meetings by summarising what’s been said and ensuring no questions are left unanswered.
  

7. Product recommendations

Enhance your customer shopping experience by providing personalised product recommendations based on preferences and browsing history.

8. Natural language processing

Use AI-driven chatbots to provide efficient customer support, address enquiries, and resolve issues through natural language understanding.

9. Data security

Implement AI for robust cybersecurity measures, protecting your business data and customer information.

10. Informed decision making

Leverage AI tools to gather and analyse data on your competitors, helping you identify gaps and opportunities in the market.

• Data-driven analysis: Tools such as IBM watsonx BI Assistant can be used to efficiently analyse huge amounts of data to uncover insights that can help your business to grow.

• Automated reporting: It can also produce real-time at-a-glance reports and dashboards that provide up-to-date information for faster, more informed decision making.

• Personalised interactions: AI tools can analyse customer data to deliver more personalised experiences, including targeted marketing messages, tailored recommendations and individual support, all of which can help to improve customer satisfaction and improve loyalty.

11. Improving HR processes

• Recruitment: Hiring staff takes time and resources away from already stretched small businesses. AI tools can be used to write job descriptions, screen CVs and match candidates to job descriptions.

• Employee onboarding: AI tools like Workday can also be used to automate onboarding tasks for new employees, such as document processing, scheduling training sessions and addressing common employee questions.

• Employee support: Reduce the number of employee queries going through your helpdesk or HR department with AI tools that offer advice and guidance to employees anywhere, at any time.

• Performance management: Tools such as Betterworks use AI for performance management, using technology to help employees set goals and helping managers to provide clear, actionable feedback. Given that 95% of managers are dissatisfied with their company’s review system and fewer than 20% of employees are inspired by their reviews, automating reviews is likely to improve the process for both employees and managers.

12. Financial management

Staying on top of finances is crucial for any business – but it’s especially important for small businesses. AI tools like QuickBooks Online’s AI financial assistant, Inuit Assist can automate financial tasks like expense tracking, invoicing and financial forecasting, taking manual tasks off your employees’ hands. Additionally, tools like Microsoft Copilot can help you analyse and organise data in Excel, helping you to make better decisions.

Pros and cons of AI for business

AI offers a range of benefits and can transform the way your business performs, but it also comes with its share of challenges and considerations. Here we look at both the pros and cons of AI for business, so you can make informed decisions to enhance your business activity:

Pros of AI for business:

Efficiency: AI automates tasks, reducing the time and resources needed for manual work.

Personalisation: It enables personalised customer experiences, improving engagement and loyalty. For instance, AI can analyse data, predict preferences, and tailor interactions for an audience. It understands customer behaviour, and can recommend specific content that boosts satisfaction and engagement.

Data-Driven Decisions: AI provides valuable insight from data, allowing informed decision-making.

Cost Savings: Automation can reduce operational costs over time.

Scalability: AI solutions can grow with your business as your needs expand.

Competitive Advantage: Businesses using AI can stay ahead of the competition by automating processes and improving efficiency, assessing big data for insights, and giving tailored customer experiences.

Error Reduction: AI improves the quality and accuracy of tasks.

24/7 Availability: Chatbots and virtual assistants provide round-the-clock support.

Cons of AI for business:

Quality Control: AI may produce content or responses that require human oversight.

Ethical Concerns: There's a risk of AI generating unethical or biased content.

Initial Costs: Setting up AI systems can be expensive, particularly for small businesses.

Dependency on Technology: Over-reliance on AI can reduce human creativity and skills.

Legal Compliance: AI-generated content must comply with intellectual property and copyright laws.

Customer Resistance: Some customers may prefer human interactions over AI.

Adaptation Challenges: Integrating AI into existing workflows can be complex and require adaptation from your team.

Top AI tools for small businesses

To help you get started with incorporating AI in your day-to-day business tasks, here are some of the top tools for small businesses and when they might be used:

ChatGPT: Ideal for automating customer support and providing instant responses to common queries. Read our guide to ChatGPT.

Google's TensorFlow: A powerful open-source platform for building custom AI models and applications.

Chatfuel: Great for creating AI-powered chatbots that can handle customer interactions and automate marketing.

Hootsuite: Uses AI to schedule social media posts and analyse their performance.

Shopify Magic: A suite of free AI-enabled features that are integrated across Shopify’s products and workflows to help you market and run your Shopify store.

Turing: An AI-based job matching platform that can help you find the right tech and engineering talent for your business.

AI assistants in different industries

AI assistants can be used across a range of different industries, offering tailored solutions to specific problems. Here are some ways AI assistants are transforming work in different sectors:

Healthcare: AI assistants have been used to analyse and interpret medical images, including X-rays, MRIs and CT scans, helping to detect diseases like cancer, neurological disorders and cardiovascular issues.

Retail: AI assistants can assess market trends, review competitor pricing and analyse customer demand – then adjust prices in real time. Retailers that have made the switch to AI pricing models have seen their profits grow from 5% to 10%.

Customer service: AI assistants can be used to provide efficient, personalised customer support that increases satisfaction, particularly through the use of chatbots. Zendesk has found that 70% of organisations are already actively investing in AI technology that automatically captures intent signals.

Banking: AI assistants are routinely used in banking for fraud detection and prevention, to monitor transaction patterns, flag unusual activities and stop potentially fraudulent transactions. BGL BNP Paribas, for instance, has increased fraud detection rates to over 90% with the use of an AI assistant.

Digital: A hot topic for any small business, AI assistants can help to prevent cyber security threats by monitoring network traffic, spotting potential breaches and responding to cyber attacks.

HR: AI assistants can reduce the burden on your HR department, with automated CV screenings, onboarding support and more, and 34% of HR leaders are already exploring opportunities for generative AI.

It’s pretty clear that AI can be a game-changer, offering opportunities for efficiency, personalisation, and data-driven decision-making. When choosing an AI tool, consider your specific business needs and goals, and take advantage of the growing availability of AI solutions to put a rocket under your progress.

Learn more about how AI can be used to boost productivity and check out our guide to the top AI tools to help you unlock the potential of AI.

Find out more about how AI can help your business and get 1-2-1 support by speaking to one of our V-Hub Digital Advisers.