AI’s Big Impact on Small Business

Source: U.S. Chamber of Commerce

Running a small business is no small feat. Every day, small business owners wear multiple hats: the visionary, the accountant, the marketer, and the customer whisperer, among others. And the fruit of this toil does not go unnoticed. These seemingly modest enterprises are creating jobs, driving economic growth, and empowering the communities they serve.

While innovation and ingenuity are essential to entrepreneurship, the emergence of artificial intelligence (AI) offers enormous promise to such endeavors. According to our report, Empowering Small Business: The Impact of Technology on U.S. Small Business, almost one in four small businesses have adopted AI, citing improved performance in marketing and communications.

AI systems can not only enhance efficiency, save time, and improve decision-making across business operations, but they can also optimize resources, personalize customer experiences, and provide valuable insights on market trends.

Here’s a look at some real-world success stories of small businesses utilizing—and benefiting from—AI.

AI Assisting with Customer Acquisition and Retention

Hrag Kalebjian is incredibly grateful for the myriad of benefits AI brings to his business, Henry’s House of Coffee – a family-owned coffee roaster. When it comes to Search Engine Optimization (SEO), AI tools have been indispensable in developing product descriptions that not only meet a specific set of criteria determined by Kalebjian but also perform well on search.

As an e-commerce brand, Kalebjian is also thoroughly invested in understanding the lifetime value of his customers—how much it costs to acquire a customer, how much they are worth, and what type of discount should a specific cohort of the customer base receive.

AI tools serve as the “analytical brain” behind these data-driven insights and help Kalebjian determine appropriate marketing and customer service strategies to implement. By customizing chatbots to respond in a certain way, Kalebjian can view these and other insights through specific perspectives, such as that of a marketing expert, venture capitalist, or scientist.

By enhancing operational efficiency and customer insights, AI enables Henry’s House of Coffee to compete faster and smarter—a huge benefit for a small business.

Using ChatGPT and Other Tools for Marketing

For Kim Cook and her three daughters, starting and operating Something Sweet COOKie Dough, has been a labor of love. The family-owned, premium frozen cookie dough business continues to grow and evolve thanks in no small part to AI.

Cook noted that the backend of her business relies on various AI platforms, including ChatGPT for marketing, social media, and content development, and Shopify for inventory management and financial operations. Even the business’s co-manufacturer uses AI to measure and scale ingredients accordingly to enhance resource efficiency and eliminate waste.

AI has also been a valuable asset for customer service management since Cook and her daughters have been able to provide prerecorded videos to answer specific questions they receive from customers on their website.

Overall, Cook was quick to acknowledge the significant role AI plays in the business’s ability to remain competitive by expanding its reach and shipping capabilities.

Analyzing Data and Research with AI

Austin Milliken, founder of Aureate Capital—an independent investment bank that serves clients across multiple industries and sectors—says AI technologies allow small businesses to be more nimble. To him, AI serves an integral function in his company’s ability to analyze research and data, develop marketing strategies and pitch materials, and share and request information from internal and external partners through tools such as DocuSign and Dropbox.

AI’s ability to present a wealth of knowledge—at a rapid speed—is perhaps equally consequential to those operational efficiency gains. Even for many of Aureate Capital’s clients who may have limited resources to make stock or investment portfolio decisions, AI tools and integrations can assist in the decision-making process or at least help validate their thinking.

It is, therefore, vital for companies to start embracing AI, according to Milliken, if they want to reap these types of benefits for their business and remain competitive.

While applications for AI continue to expand and evolve, one thing is abundantly clear: small businesses that use AI are seeing increased growth and profitability and are better equipped to compete in a dynamic marketplace.