How to Use AI in Your Small Business: Applications, Myths, and Adoption Tips

When talking about AI, we usually imply that it will be used on a grandiose scale — saving lives with AI-assisted surgical tools, predicting historic events, driving autonomous cars, and what have you. In a corporate realm, business leaders are all over it and artificial intelligence consulting is in demand like never before. Not only does it help enhance a multitude of business processes but it also serves as a great tool to win customer loyalty and solidify competitive supremacy.

But what about smaller businesses or startups? Can they use this emerging, often confusing technology that even large corporations sometimes fail to implement correctly? Let’s explore the most potent use cases of AI for small business and how it can help increase efficiency, enhance employee experience, improve sales, and make better business decisions overall.

At the same time, we have thousands of much less sophisticated customer inquiries. For example, many customers tend to double-check a restaurant’s open hours even if they are clearly stated on the official website or social media. With the latest advancements in chatbot development, such questions can be easily answered without allocating human resources.

This can significantly increase customer satisfaction as chatbots are available 24/7 and raise overall efficiency as service reps can dedicate their time to more strategically important tasks. Table reservation inquiries, hotel bookings, questions about product availability, or shipment information can be effectively processed by both textual and voice-enabled chatbots. Deep learning chatbots are even able to imitate real-life conversations by formulating answers to human queries based on upstream data collection.

With the word ‘human’ at its core, paradoxically, HR is largely about data. Conventional HR tasks such as employee performance assessment or job applicants’ skillset evaluation come down to thorough analysis first and only then to decision making. AI can again reduce time spent on finding best-suited candidates by automatically wading through hundreds of applicants and prioritizing them based on a certain set of parameters.

Especially relevant for SMBs, Google’s Hire applicant tracking system is set to reduce time-consuming tasks by highlighting the most important words in resumes, automatically scheduling interviews, and calling candidates without manually entering their phone numbers. Automatic scheduling help recruiters plan out multiple interviews and conduct them asynchronously using AI-enabled interview software.

From the hiring perspective, AI can also help writing better job descriptions. Better, in the case of recruitment, means ‘attracting exactly the type of candidate we are looking for’ or ‘widening the candidate pool by using broader job descriptions’. For example, Seattle-based Textio uses AI to help recruiters analyze text to detect which words tend to appeal to a particular gender in a specific context. Eliminating those words from the job description makes the candidate pool more diverse.

AI can also analyze employee experience within a company to predict which individuals are likely to leave, identify top performers, and adjust employee management strategies overall. For example, Worklytics uses AI to reveal employee engagement drivers and suggest to managers the best actions to take in a specific case. The software gathers data from various popular business tools including G Suite, Slack, and Office 365, and analyzes it to uncover hidden patterns that impact employee satisfaction.

Thinking about starting your own small business? Consider that 20% of SMBs fail in their first year, and 50% fail in five years, according to the Bureau of Labor Statistics. While these figures don’t seem that aspiring, small businesses often make the same mistakes. The second most mentioned reason for failure among SMBs concerns cash flow. This area remains out of complete control for many business owners, resulting in detrimental mistakes like delaying a loan payment, failing to predict creditworthiness, and misunderstanding sales trends.

AI can be this rational, cold-hearted finance assistant capable of predicting cash flow risks and helping in their mitigation. QuickBooks, an app developed by Intuit, uses AI to provide cash flow recommendations based on 90-days predictions. Whether it’s a short-term loan that might save your business or a strategic employment recommendation, QuickBooks offers advice based on real data.

For a small business, a single competitive advantage can go a long way. Quite often, many rival businesses operate in the same niche with a very narrow target audience. Every customer can make a difference. With similar products or services, competitive advantage goes far beyond simple marketing strategies and price adjustments. The first step toward gaining a real competitive significance is doing a thorough competitor analysis.

Crayon, for example, uses AI to convert the most important data from companies’ websites into insightful reports. Machine learning coupled with natural language processing enables Crayon’s software to filter data and distill it into insights. These reports are further used to create effective marketing and sales strategies. Essentially, it eliminates the need for manual research, leaving managers with more time to spend on data-based strategizing and decision-making.

With all the seemingly infinite advantages of AI, any initiatives in this regard should be thoroughly analyzed and carefully deployed. Small businesses are especially prone to making mistakes.

AI may seem like a kind of Swiss Army knife cutting through all the challenges small businesses face. However, consider this as another investment for your business to tackle one particular problem. The most effective AI solutions stem from actual business challenges. Many AI solutions are flashy, elegant, and fascinating to talk about, but they provide little value.

Figuring out the reason for AI implementation is the most important part of your adoption plan. In many cases, choosing to approach a particular problem without AI at all is the best decision. How exactly will the deployment of an AI solution provide ROI and how soon? The common trap that ambitious small businesses fall into is implementing AI to ‘find insights’. Insights, however, never directly increase your sales or market reach, but decisions based on those insights do.

Next, establish a proper data governance infrastructure. Hiring AI developers without a clear data plan is a sure way to waste money and resources. Moreover, data-based technologies will disrupt your niche sooner or later. Being prepared for this revolution with all the data being clean, structured, and consolidated in one place will get you a long-term competitive edge.

Unless there is a very specific use case, there is no need to rush AI implementation right now. Instead, focus on the research and begin preparing your organizational culture and data for the inevitable coming of mainstream AI.