AI’s unfulfilled promise to small businesses

Over the past few years, artificial intelligence has dominated business conversations. What once felt like a futuristic concept is now a tangible, widely accessible tool, one that is now seen as table stakes for businesses.

AI’s greatest promise is efficiency. For small-business owners who wear multiple hats, this promise sounds like a dream, and for some larger companies, that dream has become reality. Yet for many small and midsize businesses (SMBs) that have invested precious time and money into AI-enabled solutions, that promise remains unfulfilled.

As a CEO of a company that provides fintech solutions for SMBs, and as a small-business owner myself, I understand the desire to do more with less. I understand how AI can seem like a magical solution. But the reality is, AI tools are not currently made with small businesses in mind.

Whether you have already invested in AI tools, are in the consideration phase, or still testing tools, I urge you to pause everything, take a step back, and reevaluate AI’s role in your business.

AI’s Promise Is Not for the Masses

AI is pitched as a game changer for businesses, promising improved productivity, faster workflows, cost savings, and business growth. Major companies like Duolingo and Shopify have even suggested AI can replace human-led roles. And this may be true, for enterprises.

This level of efficiency is possible only through custom, complex, and expensive AI models that are programed by dedicated AI teams and trained on an immense amount of data—resources, and results, that are unattainable by SMBs.

The reality is, many SMBs are still digitizing their practices, their data sets are small, budgets are tight, and IT resources are minimal. This is why, instead of trying to mirror the AI adoption strategies of large enterprises, SMBs should take a different approach, one that is slow, simple, and focused on business fundamentals. By focusing on core operations like admin, customer service, and reporting, small businesses can lay the groundwork to ensure AI enhances, rather an complicates, their workflows.

A False Start: SMBs and AI Adoption

It’s no surprise that SMB adoption of AI dropped to 28% this year, a 33% year-over-year decline. Some have learned from experience that trying to mimic enterprise adoption of AI has had the opposite effect: draining time, money, and productivity.

Many SMBs still have a poor understanding of AI and its learning curves. Without proper in-house resources to implement and train on the technology, SMBs are paying for expensive tools that are not optimized to their business needs. For SMB owners who feel they’ve overcommitted, I encourage you to pause and reassess. Ask yourself: Is this tool achieving what I need it to?

Back to Basics

Broad adoption of AI is a costly mistake for SMBs. Business leaders must slow down and thoughtfully assess where AI can truly make an impact. Start small: Choose one area, such as marketing or administrative tasks, and measure results before expanding further.

Rather than investing in new tools, explore the AI features already built into your existing tech stack. Tools like Microsoft Office, Google Workspace, and Box now offer AI integrations allowing small businesses to easily explore AI applications without significant investment or complexity.  

By starting with the tools you already use, you not only lower the barrier to entry, you also concentrate your learning and adoption in a familiar environment.

AI Applications That Work

AI can be highly effective with repetitive tasks such as answering common customer questions and managing inventory. One small business, Something Sweet Cookie Dough, used AI to scale recipes and reduce ingredient waste, while also automating responses to frequently asked customer questions.

AI can be a great resource for creative ideation and research as well. However, it’s important for a human to review all materials produced by AI as the technology is prone to misinformation and to misinterpretation of the task at hand. I suggest treating AI like a new employee: regularly checking its work, conducting performance reviews, and slowly introducing new tasks. Do not overrely on AI or assume it can operate unsupervised.

AI Is Not Automatically Secure

Another major oversight is the assumption that AI is inherently secure. Most AI tools—including popular free versions like ChatGPT—learn from the data you share with them. That means sensitive business information could become part of a model’s training data. If you’re in a regulated industry or working with proprietary or confidential information, this is a major risk to your business and customers.

Before you input sensitive data into any AI tool, understand how that data will be stored and used. Once you’ve done some trial and error with free versions, consider upgrading to enterprise-grade AI tools that offer security, data privacy, and compliance features tailored to you industry.

AI Will Have a Place in SMBs

AI can support small businesses, but only if the tools are chosen, applied, and monitored with care. Until AI companies build solutions tailored to the unique needs of SMBs, emphasizing simplicity, affordability, and support, it’s up to business owners to be diligent in the tool’s evaluation. With a measured approach, SMBs can capture the benefits of AI without overinvestment, complicating workflows, or overwhelming you and your team.

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