How AI Technology is Transforming Small Businesses

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Artificial intelligence has become such a buzzword in recent months that it’s sometimes difficult to know precisely what AI tech consists of. Often, AI refers to:

Machine learning: This form of AI involves algorithms, as the name implies, learning to perform specific tasks on their own without being prompted to. A basic example of machine learning is an algorithm for a popular e-commerce site recommending products to users based on their purchase histories.
Natural language processing: NLP is a subset of AI involving computers essentially learning how to understand human language and communicate with humans accordingly. This technology drives sophisticated chatbots.
Automation: Various types of AI tools can automate tasks that a human worker would otherwise need to complete. For example, it’s becoming increasingly common for medical professionals to use AI to complete paperwork for them, allowing them to focus on other priorities.

AI technologies are transforming businesses across a range of industries and niches. Be aware small businesses aren’t exempt from these developments.

Do you own a small business? If so, familiarizing yourself with the way AI is changing how others do business could help you better understand how you might take advantage of this technology yourself.

3 Ways AI is Transforming Small Business: What You Need to Know

This isn’t an exhaustive list. Because AI tech is developing rapidly, the way it influences how entrepreneurs do business is constantly expanding. That said, three ways AI is transforming a small business that you should be aware of include the following:

Data Analysis

Analyzing various types of data can help a small business owner make informed decisions. Consider the following examples:

Analyzing social media follower data can provide a business owner with more information about their customer base
Analyzing sales data allows a business owner to identify seasonal trends
Analyzing financial data allows for more accurate budgeting and forecasting

Those are merely a few examples. Unfortunately, the task of data analysis is often time-consuming and complex.

That’s no longer necessarily the case. AI programs can perform accurate data analysis virtually nonstop. Small business owners are leveraging the technology for this purpose, helping them strategize more effectively than ever before while also saving time.

Boosting Security

Guarding against data leaks and breaches plays a key role in a small business’ reputation. Customers are less likely to trust a business in the future if, due to a lack of proper security measures, their data gets out or someone hacks their accounts.

This is another problem AI may offer a solution to. AI algorithms can boost security by identifying the signs of suspicious behavior and putting a stop to it or alerting the necessary parties promptly.

Regardless of the type of business you run, in the digital age, there’s a good chance your business handles customer data to at least some extent. AI-based security measures can allow you to do so responsibly.

Improving Customer Service

As a small business owner, you likely understand that providing strong and reliable customer service contributes to your success. However, you might also be a very busy person who must handle a wide range of responsibilities and tasks every day. If so, there’s a good chance you’re unable to promptly address all customer service requests on your own.

Thanks to AI, you don’t have to. AI-based chatbots can handle many customer requests without requiring any additional human involvement. If a customer has a request or an issue that AI can’t help them with, the AI chatbot can still assist them in contacting a human customer service representative for more help.

Using AI in this capacity will improve your customer service, thereby boosting your business’ reputation.

It may also save you time and money. If a chatbot can handle many customer service requests on your behalf, you won’t need to devote time to handling these requests on your own, nor will you need to hire a human employee to address them.

This highlights a critical point. Even if you appreciate the potential value of investing in AI solutions for your small business, you might nevertheless still be reluctant to do so because you believe embracing AI is too cost-prohibitive right now. However, by taking advantage of AI sooner rather than later, you stand to actually save (and earn) a lot of money in the long run.

The Importance of Embracing AI as a Small Business Owner

Again, these are just three ways AI is transforming small businesses. They by no means represent all the ways small business owners are applying AI technology to improve their products, services, internal processes, and more.

It doesn’t matter what type of small business you own—odds are good that various AI solutions that could benefit you are already currently available. Trends indicate your competitors are likely using these technologies already. You should do the same to maintain your competitive edge.

Getting Started With AI for Your Small Business

Embracing AI as a small business owner doesn’t need to be a challenge. Keep the following tips in mind as you explore various AI tools and services for your business:

List the various ways you might consider using AI
Search for products and services that align with your needs
Research which tools competitors in your industry might already be using
Test out different AI tools (you can usually do so with a free trial) to identify those you feel most comfortable with
If necessary, train your employees to use these tools as well

As you grow increasingly comfortable with using a few AI solutions to streamline your operations as a small business owner, you may decide to experiment with additional tools. Once more, because AI develops rapidly, new AI solutions tend to hit the market fairly often.

Make use of them accordingly. The sooner you begin working with an AI solution, the sooner you’ll begin seeing a strong return-on-investment.

Bonus Tip: Use AI to Generate Content (and Use Powtoon to Animate it)

Some small business owners are also using AI for more creative tasks, such as generating scripts for short animated promotional videos. If you also use AI for this purpose, Powtoon is a beginner-friendly animation maker that can allow you to create animated videos easily and affordably. Sign up today to get started!

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Hanna Abitbul

Hanna is Powtoon's Content Marketing Strategist. She joined Powtoon as a copywriter in 2019, after graduating from university with a specialized degree in marketing and business. She continues to inspire people to create incredible video content with blog posts, videos, guides, and more. Hanna's passions include reading, singing, and caring for animals (#proudvegan). Nothing makes her happier than waking up to her two black kitties who, contrary to popular belief, are good luck!