5 reasons why small businesses are reluctant to use AI

Small businesses in the UK are increasingly aware that artificial intelligence (AI) can make them more productive, yet most are still reluctant to use it.

In fact, the recently released 2024 Employment Trends Report, a landmark report conducted by the British Chamber of Commerce and leading recruitment firm Pertemps, surveyed over 1,200 UK small to medium-sized businesses and found that only a quarter of companies are using AI in any capacity.

Of the businesses surveyed, small businesses are the least likely to use AI, and nearly half of micro-businesses (those with 10 employees or less) say they have no plans to start using it in the future.

This is despite the same study showing growing acceptance that AI benefits business.

How can AI be useful for small businesses?

AI can potentially level the resourcing gap between smaller and larger businesses with deep pockets and huge headcounts.

It can handle many time-consuming, repetitive processes like data entry, scheduling, and customer service enquiries. This frees time to focus on the complex tasks and decision-making needed to run a growing business.

Delegating routine tasks to AI like these can also help improve productivity. AI solutions are scalable, meaning they can grow and process increasing volumes of work as your business expands, saving you money on staff costs.

So, by embracing AI early, you’ll have an advantage over your competitors who have yet to clock on.

Then why are so many small businesses reluctant to use AI?

Business owners have valid reasons to be cautious about AI, but many concerns stem from a lack of information. Let’s address some common misconceptions about AI.

1. AI is only for large, established businesses

Large corporations were indeed the early adopters of AI, as they had more money to invest in building and implementing new technologies. Smaller businesses tend to operate on tighter budgets and must be certain that any investment will deliver a clear return.

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The marketplace has come a long way in recent years, and AI tools are becoming increasingly accessible and affordable for small businesses. You don’t need funding, and you don’t need to hire a team of talent to build your own chatbots from scratch—you can simply purchase the services you need.

Some AI platforms, such as Google Gemini, Copy.ai, or DALL-E 2, are free to use, and some tools, such as Grammarly, have plans specifically designed for SMEs, offering solutions that fit different budgets and team sizes.

2. AI is too complicated to use

Many business owners aren’t fully aware of how AI can benefit their daily operations. It’s often seen as a complex, futuristic technology—even the words ‘artificial intelligence’ can sound intimidating to somebody without a technical background.

This perceived complexity can make AI seem more trouble than it’s worth. Yet, many AI tools require minimal expertise to set up.

It only takes a minute to go to ChatGPT and experiment by asking a few simple questions. Check out the responses you get when you use these prompts:

• “Draft a response to a customer asking about the delivery time for their order.”
• “How can I respond to a potential client who is hesitant about the price?”
• “Write a motivational message to encourage my team after a busy week.”

You can even give the program a little context about your business to achieve more specific and tailored outcomes.

3. AI will replace human jobs

There’s a widespread fear that the rapid growth of AI is making some jobs obsolete. Small businesses, in particular, have low headcounts and close-knit teams, and business owners naturally want to avoid speculation about redundancies. Rather than risking their people’s morale, they keep things going as they are.

AI is more likely to augment human roles than replace them. The technology isn’t clever or powerful enough to perform creative tasks without significant human supervision, and it’s better placed to do repetitive, manual tasks—in essence, the stuff people don’t enjoy doing anyway. Think transcribing calls, diary management, data entry and invoice creation. Ideally, AI taking over routine tasks should give people time for more rewarding work.

4. AI leads to costly errors

There’s been significant news coverage of AI blunders causing substantial losses for businesses, both financially and in terms of reputation, so it’s valid to worry about this risk. Small business owners may be especially cautious, given their limited resources can make it harder to rectify issues quickly.

While AI is not infallible, there are ways to prevent mistakes from happening. Primarily, you should ensure human oversight is built into your processes. For example, if you use AI to create marketing content, use human judgment to sense-check and fact-check before you publish your work publicly.

The more you use AI, the more you’ll understand its limitations and where it’s most likely to make a mistake. You can always start by giving it low-risk tasks, like scheduling email newsletters, to assess how it performs without causing significant risk to your business.

5. AI bots make the customer service experience worse

It’s true; most people prefer to speak to a real person when they contact a company’s service team. However, for small businesses with limited staff, it isn’t possible to be online and available 24/7.

AI customer service bots can support human teams by offering immediate responses to common questions, like “What’s the status of my order?”. This is a huge advantage for customers who need quick answers. For straightforward issues, the speed of these chatbots is better than waiting on hold for a human representative.

Three steps to start using AI in your small business

With the right approach and tools, your business can benefit from AI just as much as a larger business.

1. Identify small areas to improve over time

It’s often best to focus on one or two areas where AI can have the most immediate impact. Consider your current processes and which tasks are time-consuming or prone to human errors, such as typos or miscalculations. These often make good candidates for AI automation.

For example, if you spend a lot of time responding to customer enquiries, an AI chatbot could take over answering routine questions. Or if you manage inventory, an AI system like Katana could help you keep track of stock levels, forecast demand and reduce waste.

As you become more experienced and confident with new technologies, gradually introduce others across your business.

For example, you could use Buffer to generate social media post ideas for your marketing. Once you see the benefits, you could add more complex applications like Hootsuite to gain insight into your social media performance and conversions.

2. Train your team

It’s vital that everyone feels comfortable using new technologies, especially those who work in areas perceived to be more at risk of obsolescence, such as reception staff or content creators.

Remind staff that technology is there to free up their time for other tasks rather than to make their work redundant. That being said, when delegating a task to technology, you’ll need to research and make staff aware of these potential problems:

• GDPR and legal issues around inputting sensitive data into AI models
• ethical concerns over racial, gender, and other biases within AI
• factual errors and outdated information

Set a formal company policy on when and how staff can use AI to avoid issues.

3. Monitor your progress and adjust

The business case for AI only makes sense if you can see a measured impact on your company’s productivity and bottom line. Track key metrics such as the time it takes to complete tasks, the cost of any services, and the impact on customer satisfaction.

Don’t be afraid to tweak your approach if it’s not delivering a worthwhile return on your investment.

What do you think?

Using AI can undoubtedly change the way you do business. But do you use it? Were you an early adopter, or do you prefer to keep things consistent? Have you found some ways AI has helped you save time, or do you think it’s not applicable in your industry?

Let us know your stance with a comment.

Thanks for reading. Look at our other blogs for more insights on the small business trends you need to know about.