Customer expectations, rising costs, supply chain disruptions, employee turnover — the list goes on.
Simply put, small businesses deal with an unrelenting number of challenges, each with the potential to hurt the bottom line. Compared to mid- and enterprise-size companies, merchants typically feel the full weight of these pressures.
As a result, business owners are looking for new, innovative ways to level the playing field. The good news? That’s where artificial intelligence (AI) can come into play. In this article, we’ll explore the ways AI can help SMBs survive and thrive while streamlining their core operations.
The State of SMB AI Adoption
Given the breadth of their obstacles, small business owners have taken to technology at an accelerated rate over the past few years. Recent surveys by Microsoft and the U.S. Chamber of Commerce highlight a significant trend toward AI adoption.
Per the data, a third of SMBs in Canada, Brazil, Mexico, Colombia, Argentina, Costa Rica and Puerto Rico had already invested in AI technology by 2023. Moreover, 71% said they planned to continue or start using AI the following year.
According to the U.S. Chamber of Commerce, 95% of American SMBs rely on at least one technology platform for daily business operations, with social media, digital payments and point-of-sale (POS) systems among the most popular. The majority plan to leverage AI in the future, with almost a quarter already using it to their advantage.
How are they leveraging AI? Here are the top 10 applications so far:
- 56% – Marketing/promotions
- 42% – Communicating with clients and prospects
- 36% – Identifying potential customers
- 33% – Managing inventory
- 32% – Developing customer insights
- 28% – Managing customer relationships
- 28% – Processing sales
- 26% – Preventing fraud
- 21% – Processing returns
- 21% – Accounting
Benefits of AI in Small Business Operations
The impact of AI on SMBs cannot be overstated. From the data gathered, merchants who have integrated AI into their operations report profound advantages:
- Relationship management: 86% of SMBs say AI has enabled them to maintain more frequent and effective communication with customers.
- Long-term growth: 84% believe AI will significantly contribute to their business growth over time.
- Business productivity: 82% report that AI has enhanced their operational efficiency.
- Customer acquisition: 77% state that AI has been pivotal in helping them find new customers.
- Competitive advantage: Similarly, 77% say AI tools have allowed them to compete more robustly with larger enterprises.
- Cost-efficiency: 69% of SMBs find that AI helps mitigate rising costs.
AI Use Cases for SMBs
AI’s versatility allows it to be applied across various aspects of business operations, proving especially beneficial in the following areas:
- Streamlining administrative tasks: AI can automate routine tasks such as scheduling, invoicing and even compliance reporting, freeing up valuable time for SMB owners to focus on strategic activities.
- Automating fraud detection: With AI, businesses can enhance their security measures, using pattern recognition and anomaly detection to identify and prevent potential fraud before it affects the bottom line — or their customers.
- Enhancing customer interactions: AI-powered chatbots and virtual assistants can provide round-the-clock customer service, handling inquiries and resolving issues faster than ever.
- Optimizing inventory management: AI helps in forecasting demand more accurately, managing inventory levels and optimizing logistics, ensuring that operations are as efficient as possible. Plus, this helps merchants avoid costly stockouts.
- Improving decision-making: AI excels in processing vast amounts of data to derive insights that inform better business decisions, from optimizing marketing strategies to tailoring product offerings.
The integration of AI into small business operations is not just a trend but a transformational shift that is setting new standards in how businesses operate and compete. As AI technology becomes more accessible and affordable, it’s clear that the potential for SMBs to enhance their operational capabilities and achieve sustained growth is immense.
Embracing AI is no longer just an option for SMBs; it is becoming a crucial part of their strategy to ensure future viability and success in the digital age.
