Is Investing In AI A Smart Move For Your Small Business?

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Are AI and associated technologies only for large companies? 

The answer is a clear no. 

As of 2021, 51% of all e-commerce platforms used artificial intelligence at some stage. As technology matures and improves, that number will go up drastically.

 The global AI market will be worth more than $190.61 billion by 2025

Small and medium businesses will account for a significant share of this percentage. With AI becoming more and more accessible, we can expect a lot of small businesses to incorporate it in their operations.

But one important question remains – Is investing in AI a smart move for small businesses? 

What are the costs and what are the risks? 

How will AI benefit small-scale operations when compared with large-scale operations? 

Today, we will answer all these questions and more.

Is investing in AI a smart move for your small business?

We will look at the following factors to determine whether AI is relevant for small businesses or not:

  1. Cost-effectiveness
  2. Increase in productivity
  3. Customer support
  4. Business analytics
  5. Targeted marketing

Levity’s guide on AI for small businesses goes into these areas along with other important focus points. For our purpose, we will limit ourselves to these 5. 

Without wasting any more time, let’s find out how and why investing in AI can be a great move for small businesses. 

1. Cost-effectiveness

Businesses are always on the lookout for ways to save money. At the same time, compromising on quality to cut costs is a fatal move. 

One of the best ways for small businesses to save money without compromising on anything is using AI. Processes become much faster with artificial intelligence and machine learning.

For product-driven businesses, AI helps in saving money on both production and distribution. It is also used for inventory management, predicting demands, and ramping up productions accordingly. With the help of AI-based tools, even small businesses can significantly save on resources.

Another factor that comes into play is the cost value of time. With AI tools, you end up saving a lot of time. What would require multiple days if done manually can now be accomplished in mere seconds. If you want to save both time and money, as any business would, AI is the way forward.

However, when talking about cost-effectiveness and AI, you cannot undermine the initial cost of investment. Depending on its use case, AI-based services can be very expensive. As a small business, it is almost always out of your gambit to develop in-house AI tech. The only alternative is to outsource services. It entails the cost of both the tools and the services. Before you know it, the costs can add up to a significant sum.

If your needs align with the value that AI-based tools provide, go for it at all costs. The dividends will pay off in due time. 

2. Increase in productivity

The goal of every business, no matter what its scale, is to increase productivity. 

If you are getting more things done in less time and with fewer resources, you are winning the game. There are several challenges to doing this with manual labor alone. First, you will be facing the pertinent problem of human error. 

For example, 90% of all data breaches are a result of human negligence. That’s why businesses are moving towards AI for cybersecurity – including small businesses. 

If you continue to employ human insight but eliminate human errors, your productivity will skyrocket.

One of the ways AI helps in productivity is by reading and analyzing massive chunks of data. Data that could have required thousands of people and tens of years to process is now a matter of minutes. 

The same principle can be useful at a macro level for small businesses. Reports suggest that around 20 million manufacturing jobs will no longer exist in 2030 since AI and robotics would have taken over. 

While that may seem like a doomsday scenario for many workers, it is indeed not. When machines take over mechanical jobs, more humans would be free to explore the possibilities of robots, AI, and human society as a whole.

 Incorporating AI-based technologies and systems is one of the easiest ways for small businesses to make the best of their limited resources. If a small-scale business gets it right, AI can help it increase revenue. 

3. Customer Support

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Dealing with customers is often the most dreaded part of doing business. 

Nevertheless, it is essential to do it right. Not only will it make customers happy, but you will also learn a lot from honest customer feedback. AI plays perhaps the most easily noticeable role here. 

In 2022, most of us have at some point interacted with chatbots. More than 80 million marketers were willing and planning to deploy chatbots as a part of the marketing strategy in 2020. Over the next few years, chatbots will continue to be used widely across several platforms.

What makes chatbots so good is the fact that it solves a very relevant problem in the customer experience space. 

Customers are often not at their best when talking to customer support executives. Having a chatbot solves this problem, simultaneously making it easier for customers to find specific answers. 

As of now, most businesses use a combination of chatbots and human customer executives. That might change as AI continues to grow.

Small businesses can also greatly benefit from chatbots. Customer support is a resource-intensive job that requires a sizable team. With chatbots, the load on the team can be reduced. While they will not be totally redundant, their skills could now be employed elsewhere. 

As the use of chatbots continues to grow, many small businesses will adopt it. AI will play a key role in making chatbots more efficient for direct customer interaction, as happens in many small businesses. It is undoubtedly one of the most relevant use cases for the application of AI in small businesses. 

4. Analytics

For the sake of oversimplification, we can say analytics refers to anything that deals with interpreting data. 

Even before the advent of AI as we know it, machines have been better than humans in finding patterns among huge data sets. 

As pattern recognition has become more sophisticated, the need for the conjunction of humans and machines in this field is urgent. While large businesses largely dominate this space, even small businesses can now incorporate this technology very easily. 

AI-based analytics is present all around us, be it social media or eCommerce. 

As more and more small businesses enter both social media and eCommerce spaces, the need for AI integration will increase significantly. At that point, using AI-based services will no longer be an option. 

The companies that start early will have a definite first-mover advantage. They will be much of the game for the others to catch up. 

Business analytics is both simple and complex. AI, however, can play an important role for both. 

Problems that require human power can be automated to save both time and resources. For complex, we will now have more resources to deploy. It is a crucial determiner for small businesses since they often have a small workforce.

Analytics prepares the ground for marketing, which is our next and final argument. Empowered with data, marketers can make much better marketing decisions. 

5. AI in marketing

AI plays a rather interesting role in the field of marketing. 

At present, the use of AI is more in micro-components of marketing. We see the use of AI in marketing when it comes to individual components like augmented reality try-on, interactive games and applications, enhanced eCommerce experience, content creation, and so on. 

Over the next few years, we can expect to see AI becoming more indispensable in marketing.

Personalized recommendations are a very relevant use case of AI for small businesses. When dealing with a small customer base, it is relatively easier to provide a customized consumer experience. 

AI-based tools are widely being used to predict customer behavior and plan accordingly. With the technology becoming more affordable, small businesses will leap into the tech. It will be an important distinguisher for many businesses to serve customized products and services.

AI also plays a very important role in advertising. Ai-based ad monitoring services can dissect an ad into bits and elements. By doing that, you get factual information on how each segment performed. Based on that data, marketers can then make more impactful and targeted ads. It is a very common example of the use of AI in marketing.

Small businesses can get ahead of the competition by incorporating AI-based technology and services at the earliest. 

However, it is very necessary to be clear about what you want before deciding to invest.  

Sometimes, the returns on investment will come after years. It is important to not haste through the process and jump on to the first service that comes across. 

If used tactically, artificial intelligence and associated technologies will transform the small and medium enterprise (SME) sector.


As must be evident by now, AI can greatly improve how your small business performs.

To be relevant in the coming decades, incorporating AI in business is non-negotiable. The benefits mentioned here are only a few among many. 

The more you explore, the more possibilities will come to you.


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