The Top 3 Advantages of AI for Small Businesses

AI is no longer the exclusive purview of big businesses with substantial IT departments and ample funding. However, compared to their larger enterprise counterparts, Main Street SMBs can achieve growth through the strategic application of AI in a somewhat different method.

However, smaller companies aren’t only catching up. Small and medium-sized businesses are utilizing AI in ways that are specifically tailored to their operations and scale, ranging from improved working capital access to marketing and workflow automation.

SMBs are utilizing AI more locally than major corporations, which may utilize it to optimize worldwide supply networks. For example, a small vehicle repair business could use AI to forecast, based on previous data, which components will be needed most frequently. This would eliminate the need for vast stocks and guarantee that commonly needed parts are always available. Similar to this, a nearby retail establishment may apply AI to optimize staffing schedules based on foot traffic patterns from customers, guaranteeing that the appropriate amount of workers is present at the appropriate times.

The way that SMBs choose to use and incorporate AI into their business models will determine how successful they are. Main Street companies may utilize AI to drive growth in ways that are meaningful and sustainable, setting themselves apart from larger competitors in the process by concentrating on applications that fit their particular requirements and capabilities.

AI’s Prospects for Main Street SMBs

SMBs, which are often smaller manufacturers, service providers, eateries, and local retailers, deal with different opportunities and challenges than do major corporations. These companies frequently have fewer employees and less cash, and they have stronger relationships to the areas in which they operate.

The desire for efficiency and customisation, along with a local focus, has caused SMBs to adopt AI in ways different from larger firms’ large-scale, data-intensive deployments.

Operational effectiveness is essential to the success of small enterprises. Data input, inventory management, and customer service are just a few of the repetitive, time-consuming jobs that AI systems can automate. Small firms can eliminate human error, cut down on manual labor, and free up staff members to work on more strategic tasks by automating these operations.

“A range of solutions are being used by small business owners. In an interview published on August 15, American Express Vice President of Marketing, Business Blueprint and Small Business Banking Brett Sussman said, “They may have seven or more business apps in their back office, and they’re looking for a simpler and more efficient solution.”

96% of SMBs who have used AI technologies, while not necessarily generative AI, see it as a useful method of streamlining processes, according to recent research by PYMNTS Intelligence.

Marketing for Main Street SMBs Powered by AI

The capacity to swiftly implement AI solutions that are especially suited to their requirements is advantageous for SMBs. In contrast to larger businesses, which can need more complex customization and integration, a lot of AI solutions for SMBs are plug-and-play, meaning they can be quickly and easily implemented. Due of this flexibility, SMBs may test out various AI applications without having to make a sizable initial investment.

AI can assist small firms in creating tailored marketing efforts that appeal to particular clientele, increasing engagement and conversion rates. Recommendation engines with AI capabilities can make product or service recommendations based on a customer’s historical behavior, which increases the possibility of repeat business. AI can also improve customer service by offering predictive insights that foresee customers’ requirements before they even ask for assistance, as well as real-time support.

According to data from the PYMNTS Intelligence report “Innovators and Cost Cutters: Growth Strategies for SMBs,” 51% of SMBs with growing revenues employ artificial intelligence (AI), compared to 37% of SMBs on average. Companies that generate more than $1 million in revenue or those with growing revenues are twice as likely to adopt AI as those with flat or declining revenue.

According to the survey, 69% of SMBs with declining revenues say they have never considered utilizing AI, suggesting that they may be less aware of the benefits of doing so.

AI is also changing the working capital landscape for small firms by providing more specialized, effective, and easily accessible finance choices. For instance, Bridge and Lama AI collaborated on Wednesday, August 21, to increase the number of commercial loans available. Financial institutions will have access to Bridge’s marketplace, which links lenders and company owners, by utilizing Lama’s AI-powered origination technology.

In order to assess an SMB’s creditworthiness, AI-driven algorithms can examine a larger range of data sources, including non-traditional indicators like transaction history, social media activity, and customer reviews.