10 things you need to know about using AI for business

More than 21m people in the UK are now estimated to regularly use tools and apps powered by artificial intelligence (AI), including many small-business owners. From saving time and cutting costs, to improving efficiency, productivity and turnover, AI is helping many UK SMEs to be more successful.

AI describes the ability of machines or software to perform tasks that typically require human intelligence, which includes answering questions, learning from data, recognising patterns, solving problems and making decisions. AI can also automate repetitive tasks and summarise large amounts of data with amazing speed.

As AI continues to learn and improve, many more UK businesses are likely to use it much more often. If you are interested in finding out how to use AI for your business, here are 10 things you need to know.

1 There are different types of AI

ChatGPT, Microsoft Copilot and Google Gemini are among the most widely used “generative AI” platforms. After you type a question or command, generative AI platforms rapidly answer questions or create text, images, music, video or code, “scraping” information from existing online sources. “Traditional AI” (also called “narrow AI” or “analytical AI”) uses logic or rules to analyse data to then make decisions, predictions or recommendations.

2 Small UK businesses use AI for many reasons

• Customer support: AI-powered “chatbots” offer a cost-effective way to answer customer inquiries, resolve issues and provide 24/7 customer service.

• Task automation: AI-powered tools can automate repetitive tasks such as invoicing, inventory management, data entry, etc, saving businesses valuable time and money.

• Marketing and sales: AI is used to personalise email campaigns and optimise online ad targeting, while CRM software AI-enabled predictive analytics can be used to increase leads and conversion rates. AI is also now used to create a huge volume of marketing and social media content.

• Operations and logistics: AI is helping many businesses to streamline their supply-chain management, while even small logistics firms are using AI to cut their delivery times and costs.

• Decision making: AI-driven dashboards and analytics can help owners make smarter decisions in real time. AI can also be used as a “critical friend” to test ideas, develop new products and inform strategic growth plans.

3 SMEs in different sectors are using AI in different ways

• Retail: Small retailers are using AI to analyse customer purchase history and send personalised marketing messages/emails to drive repeat sales.

• Hospitality: Hotels are using AI-enabled chatbots to respond to booking queries and upsell other services/deals, freeing up staff and boosting revenue.

• Professional services: Accountants are using AI-powered transcription and summary tools to streamline client meetings and generate reports sooner.

• E-commerce: AI can be used to predict demand, manage inventory and quickly generate product descriptions for ecommerce sales and marketing.

• Construction: Small constructions firms are using AI to improve project planning, reduce costs and streamline operations. It can also prove useful when producing estimates or tendering for new projects.

• Manufacturing: AI is helping small UK manufacturers to boost their productivity, reduce waste, improve quality control and make better strategic decisions.

4 Businesses of all sizes can benefit from AI

Cloud-based AI platforms and subscription models make AI affordable to even the smallest of businesses. Because AI is either free or affordable and easy to use, small firms can access the same advanced tools as big companies, which helps to level the playing field somewhat. AI can also help small businesses to scale without having to significantly increase their overheads and headcount.

5 Introducing AI into your business can be quick and easy

You could start by using AI to automate tasks that are repetitive and time-consuming, perhaps where mistakes are more common, too. Consider using AI chatbots if you have many customer enquiries to manage. Maybe AI could save you time and money when marketing your business or managing your finances or people. Find out about cost-effective standalone “turnkey” AI solutions that can be integrated with your existing software. Involve your team, because their knowledge and support will really help. Provide training and guidance where necessary.

6 Using AI in your business need not be expensive

Many AI tools can be accessed for free online, while others are “pay as you go” or involve paying a subscription (£10 up to hundreds of pounds a month). Free trials and low-cost plans for limited users may be available. Cost will be determined by AI features, your integration needs, as well as support and compliance requirements in your sector. For example, in finance, healthcare, etc, higher-level AI security is required. The AI solutions you choose should be scalable as your business grows.

7 Be limited and specific with your initial AI use

Rather than going all-in with AI, if you are new to it, a better approach is to trial one or two AI solutions in specific areas, measure their impact on your workflow and costs, find out what has worked well and what hasn’t, learn lessons and plan before using AI in other areas. Pick specific parts of your business where AI can also save your business time and money and provide other valuable benefits.

8 AI does not get it right all the time

There is no doubting the power and attraction of AI, but it can be flawed. AI can draw from poor-quality sources, while your own data must be accurate and up to date. Generative AI can give you wrong answers. And AI systems learn from historical data, which may contain biases or not tell you anything about the future. The prompts that you input into generative AI determine the replies you receive. Asking the right specific questions is essential, which is something you must master. Double-check all information that is given to you as fact.

9 Do not allow your business to become too reliant on AI

AI could bring your business many advantages – but avoid overreliance. AI should complement human intelligence and judgement, not replace it. It does not always understand context or nuance, and it will likely fail when it comes to tasks that require human intuition, ethical reasoning or mental agility. AI can also struggle with things that are new, unique or ambiguous. AI still has lots to learn, but that does not mean you cannot use it to your advantage.

10 Some caution is advised when it comes to AI

AI platforms invest heavily in security. They also have privacy policies and there are regulations with which they need to comply. But to mitigate your risk, caution is recommended. Do not share passwords or personal, financial or security information, etc. Check the privacy policy of AI platforms before your use them and access them only via secure networks and devices. Protect your data at every stage by using encryption; limit access to sensitive data and make sure your people get AI security training.