While many business owners are still trying to figure out exactly what artificial intelligence (AI) means for them, a new report from the Small Business and Entrepreneurship Council (SBEC) shows that a large percentage of small businesses are using AI tools and vastly improving efficiency and saving hundreds of billions of dollars annually.

The SBEC survey reports that nearly half (48%) of small businesses started using AI tools in the past year, and 29% have been using them for one to two years. According to SBEC CEO Karen Kerrigan, “Small business owners have rapidly embraced AI, and the range of tools and applications are helping to boost profitability, productivity and competitiveness at a time when they need such support. In fact, 93% of small business owners agree that AI tools offer cost-effective solutions that drive savings and improve profitability.”

AI tools for your small business toolbox

The first AI tool to gain significant traction was ChatGPT. Like all AI tools, it digests vast amounts of data and can instantly draft a write-up on anything you ask. (It is important, however, to check its work as it is not always 100% correct.)

There are also AI tools for just about anything you need for your business: marketing and sales, drafting business plans, financial management, and human resources—and often at little or no expense. Here are a few tools to try:

• Upmetrics—Tool for writing business plans with 400 templates to choose from
• ClickUp—Cloud-based project management tool
• Jasper—Content generator for articles, blogs, social media posts, and marketing copy
• Zoho’s Zia—Sales tool for lead generation, lead management, data collection, and writing sales copy
• ChatSpot by HubSpot—Free sales and marketing tool, even if you’re not a HubSpot user
• DALL-E 2—Creates realistic images from written descriptions for creative development
• Manatal—HR recruitment tool
• Motion—Calendar tool to track your time and build itineraries
• Lumen5—Video creation tool
• Otter.ai—Meeting assistant tool that records conversations, takes notes, transcribes interviews, and generates summaries

Utilizing AI can save small businesses time and money

The SBEC survey found small businesses have experienced significant time and cost savings due to AI, allowing them to redirect resources to various areas, including:

• 41% have used AI to redirect their own time and employee time to higher-value work
• 39% have invested in AI tools for innovative solutions for customer engagement and retention
• 37% have used cost savings from AI to invest in other new technologies
• 36% have kept prices stable for customers in this inflationary environment
• 34% have used cost savings to pursue growth opportunities for their business
• 25% have used cost savings to increase wages and benefits
• 25% have used cost savings to set aside capital for emergency/other purposes
• 20% have used cost savings to pay down debt more quickly

Workforce issues driving AI adoption

In addition to saving time and money, the main driver for adopting AI tools is the number-one issue facing small businesses at the moment: a tight labor market. Coming out of Covid, more small businesses are having to deal with finding and retaining workers. Unemployment is at historic lows, and with remote work still widely available, many workers can now take jobs all over the country, leaving local retailers, restaurants, and manufacturing plants with fewer options for talent.

Since small-town workers can earn big-city wages working remotely, this has also led to an unsustainable rise in worker pay for small businesses. According to the SBEC report, 25% of small businesses said rising labor costs led them to AI tools; 19% said they moved to AI to augment the skills of existing workers or because they were unable to find skilled workers.

In addition to workforce issues, almost one-third of businesses surveyed by SBEC cited the need to compete with other businesses, including larger companies, as their reason to turn to AI.

Downsides of AI for small businesses

While AI tools are here to stay, that doesn’t mean there are no downsides:

Lack of creativity: First of all, the information provided by AI writing tools is often wrong, and the writing style can be stilted and lack a human element (as a writer I’m compelled to say that!). That same lack of creativity is also a common problem with many AI tools.

Missing an emotional element: AI also lacks the emotional element that humans bring to the table. While too much emotion in the workplace may be detrimental, empathy and decision-making based on a lifetime of experiences do matter when managing people and working as a team.

Robotics are expensive: If you’re talking robotics, that is still an expensive proposition. Standard robots that can do one task have been around for a long time and may be affordable, but robots that can think and take on multiple and complex tasks are still very expensive.

Fear of Skynet: The fear of “Skynet”—the AI company that took over the world of humans in the iconic movie The Terminator—is real. Our government is working feverishly to legislate and regulate against a similar dystopian nightmare. More to come on that in a future article.

Consider using AI in your business

For now, you owe it to your business and your customers to explore these AI tools. In our economy, where time and money both matter, AI will help with both. And, for the record, no AI tools were used in writing this article!