Artificial Intelligence: Uses And Threats For Small Businesses
Tags: ai, business
Published: 2023-09-06 13:25:18

Artificial intelligence (AI) is the ability of a computer or machine to carry out tasks that usually require human intelligence. The technology allows machines to learn and adjust from experience and data inputs to perform human-like tasks such as conversing.

AI can power customer service chatbots, implement marketing strategies, predict advertisement performance and follow up with leads. This allows small business owners to find extra time to plan what’s next for their business, improve their products or services, or interact with customers.

Justin Fortier, CEO of [FYC Labs](https://fyclabs.com/), said: “AI has become a major trend as of late, but we are seeing it become an even bigger part of how small businesses run and operate.

“Small businesses are increasingly realizing they can use AI to reduce the time it takes to do a lot of menial, day-to-day tasks.”

[59%](https://internetretailing.net/two-thirds-of-uk-smes-already-using-ai-to-grow-their-businesses/#:~:text=As%20many%20as%2059%25%20of,according%20to%20a%20new%20study.) of small businesses in the UK are already using AI in some form, whilst 23% plan to do so in the future.

So how can small business owners use AI to impact their business positively, and what are the threats?

## How Is AI Helping Small Businesses?

[91%](https://www.constantcontact.com/blog/small-business-now-report/) of businesses using AI say the technology has made their business more successful. Here are some areas of a small business that AI can positively impact:

**Marketing **

AI can collect and analyse customer data such as behaviours and preferences so that small businesses can create personalised marketing campaigns and messages that resonate with their customers’ needs.

AI can produce a broad range of short-form and long-form marketing materials - such as social media captions, blog posts, newsletters, or infographics - in natural language, so it seems like a human wrote it.

Additionally, AI can augment human-created content by automatically editing the work or suggesting the most effective tone.

![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/be8lo6zsm2dciiht2w4o.png)

(Image Source: Fit Small Business) 

Frank Vella, CEO of [Constant Contact](https://www.constantcontact.com/?&cc=GOO-231766&pn=search&gclid=Cj0KCQjwgNanBhDUARIsAAeIcAs_20Fq1Fze6vpyoSvGQv1hwgWl9396Oz_FT_raG7otFhiZ5RgsWSUaAqwmEALw_wcB&gclsrc=aw.ds), said: “Small businesses and nonprofit organizations are using tools that leverage AI for better outcomes — to enhance their creativity, get closer to their target audiences and drive more sales volume.

“As their marketing sophistication grows, we also see them look to incorporate AI and automations into more areas of their marketing.”

**Advertising **

AI tools can learn which adverts are most effective for which audiences. Then, these tools recommend images and words that will perform best and how to structure the advert for maximum results.

**Customer Experience**

AI is a powerful tool which can be used in multiple ways to enhance the customer experience that a small business offers.

Firstly, many small and large businesses use AI-powered chatbots to tackle customer service issues quickly and efficiently, which reduces wait times and makes it easier to offer immediate customer service even if you only have a small team. 

![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/a58fi6ddjb5hn5zkesfv.jpg)

(Image Source: Infobip)

Secondly, small businesses can automate routine tasks such as sending order confirmations and following up on support tickets. This saves time and resources while ensuring consistent and timely communication.

Finally, with [4.6 billion](https://www.statista.com/forecasts/1143723/smartphone-users-in-the-world) smartphone users worldwide in 2023 and [nine new smartphones](https://www.smartphonechecker.co.uk/phones/new-releases) launching in August 2023 alone, a mobile consumer experience is crucial for small businesses to reach their target audience in today’s digital age.

AI can help shape a mobile consumer experience by offering voice-activated searches, personalised recommendations, and enabling customers to make purchases effortlessly using their smartphone.

## What Threats Does AI Have On Small Businesses?

**High costs**

Adopting AI can be costly for small businesses. The initial expenses include acquiring the necessary hardware, software, and infrastructure.

Furthermore, small businesses also need to consider ongoing expenses such as maintenance, updates, and training to ensure an effective and efficient use of AI. 

Small businesses often need more financial flexibility, so allocating a portion of their budget to AI may not be feasible, putting them at a competitive disadvantage to large firms with more financial resources to invest in the technology.

**Data gaps**

AI technology relies on data to learn and adapt. So, if the data used for training is limited or of poor quality, it can compromise the accuracy and effectiveness of the AI system.

Small businesses may struggle to gather enough data for their AI systems to handle all scenarios or behaviours, unlike larger firms with vast data access. 

**Skill gaps**

The development and deployment of AI involves complex processes such as data processing, algorithm selection, model training, and performance evaluation. So, adopting AI requires technical expertise and knowledge. 

However, small businesses may have limited access to experienced professionals with the expertise needed, so they may need outside help with selecting the right AI tools or frameworks, integrating AI systems into their existing infrastructure, or effectively managing and maintaining AI solutions. 

Unpredictability 

AI systems can sometimes behave unpredictably, producing results or content that humans did not intend. This could result in unexpected costs, damages to the reputation of a small business, and a potential loss of customers.

Andréa Morris of [Forbes](https://www.forbes.com/sites/andreamorris/?sh=1d5bd9f6d5c6) said: “Billions of different weights influence any single decision of a large, state-of-the-art AI system. This currently makes it impossible for technologists to unpack and understand exactly why it did what it did. This also makes it impossible to track and predict, with any degree of certainty, what it's going to do next.”

**Cybersecurity risks**

AI systems are subject to cybersecurity risks due to their complexity and interconnectedness. This can be challenging for small businesses lacking the financial and technical resources to invest in robust cybersecurity defences.

Here are some cybersecurity risks associated with AI systems: 

- Data breaches. AI relies on large datasets for training and operation. These datasets can include sensitive information, so if unauthorised individuals gain access, it can significantly harm the business.
- Adversarial attacks. Adversarial attacks involve manipulating data to trick AI algorithms, leading to incorrect outputs or compromised system behaviour. For example, attackers can alter image text, causing AI algorithms to misclassify objects and provide misleading information.

Kimberly West, founder and CEO of [Magnum Opus Consulting](https://magnumopusconsulting.com/about/), said: “The mishandling of customer data, either intentionally or inadvertently, can lead to a breach of trust, hefty fines, and irreparable damage to a company's reputation.’

## Conclusion

AI is a potent tool that can assist small businesses in enhancing their operations, expanding their business, and staying ahead of the competition.

AI will have a significant impact on the future of business, and small business owners should take note of this and implement AI for work tasks that are taking up most of their time, such as dealing with customer queries online or creating social media posts. 

However, it’s crucial to thoroughly assess your business needs and choose the appropriate AI solutions to meet those requirements. With meticulous planning and execution, AI can be a valuable resource for small businesses.