Publication by U.S. Small Business Administration

Technology allows small businesses to be more competitive in today’s fast-paced economy. The federal government has adopted Artificial intelligence (AI) as a way to help them better serve the public. As a small business owner, AI can help your small businesses do more with less. 

SBA is dedicated to informing small businesses about the ethical use of AI tools. We also want to help you think about effective ways to implement AI into your business practices. AI is relatively new, so start small. If you are unsure what tool you may need, many AI tools offer basic services for free or at a lower cost. Try testing them to see if they add value to your business. You may find they improve internal efficiencies, freeing up your time to focus on growing your business.

Read on to find out about both the benefits and risks of using AI in your small business. If you’re new to AI terminology, our list of common AI terms can help you make informed decisions. You can also read more about government use of AI at AI.gov, or read through additional small business AI resources.

How AI Can Benefit Your Small Business

AI can improve efficiency, which can help business owners save time. It can also save on costs and help your business stay competitive in times of mounting inflation. If a job market is experiencing labor shortages, AI can help compensate for skilled labor.  AI can help your business:

• Solve problems before they happen. Tracking traffic and flight delays can help you to avoid delivery and travel issues. Monitoring floodplains can help you prepare for or avoid disaster damage. Rate optimizers can help lessen shipping costs. AI can even help you find ways to mitigate your business’s environmental impact that won’t break the bank.
• Safeguard your data. Look into security software or vendors that use AI technology. The ability to automate security functions can help security professionals process more data at a faster rate. The ability to quickly react to an attack and apply a security patch can make all the difference to your small business.
• Make better business decisions. AI can help you analyze your small business data and pick out common themes. Use your own client data to make better strategic decisions. Data inclusive tools can also help you compare your business to similar businesses and find gaps that you can address or advantages you can exploit to give your business an extra boost. 
• Take on repeat tasks. Use a voice assistant to program monthly meetings. Set calendar reminders that remind employees of important work deadlines. Sort your email into inboxes by task. Update to-do lists or restock inventory without having to stop what you’re doing. AI can also be used to record and summarize your team meetings. You can also generate reusable templates  that reduce time and improve communications.
• Create business content. Get help when editing photos or videos. Draft a business plan. Write job postings and blogs. AI can also use your original marketing content to develop e-commerce product descriptions or generate and schedule social media posts across multiple platforms or develop engaging content based on trending hashtags and topics. To keep your budget down, make variations you can use on different sites or over several months.
• Collaborate and brainstorm. Get ideas for a logo design that uses your company colors, or to come up with a marketing plan that meets your budget. Ask about a solution for a business blocker. If you work alone, AI can help you collaborate on business solutions. You can also use it to find problems in upcoming projects, such as hidden costs or possible financial risks.
• Improve customer service. Add a website chatbot that can answer common questions or complete an order. Automate your phone service to route calls to the right department. Fine-tune ads to better target your customers’ interests and needs. Write courteous, thoughtful replies to online reviews.

Risks of AI Use

Using AI can mean your business is assuming a certain amount of risk. If it is part of software you have purchased, those creators are responsible for their product’s use of AI.

If you are using free AI tools or software in your small business, have another person review all AI products. This will help make sure they are being used ethically, securely, and in a manner that accurately represents your business.

If your small business has an attorney, consider a consultation. Your lawyer can help make sure you are using AI consistent with local laws or best business practices. Other considerations include:

• Intellectual property. AI sources content from the web. Make sure anything you produce doesn’t infringe on any patents, copyrights or trademarks.
• Security risks. Try not to feed any sensitive data or proprietary information. This will help keep it out of the data pool that the system uses when producing content. Keep an eye out for phishing campaigns that might have been written using AI.
• Customer trust. Tools that recognize AI-generated content may mark it as spam, or as not generated with real knowledge of the recipient. This could create customer resistance to future outreach efforts. Make sure a person assesses all the messages and outreach campaigns that AI generates.
• Ethical concerns. Monitor and review content to make sure it reflects your business’s culture and principles. While there are currently no federal or state laws that require businesses to disclose the use of AI, it is becoming an expected best practice. Consider drafting a public statement that discloses how your small business uses AI.

Common Terms

Artificial Intelligence (AI): AI is a set of systems that program computers to solve problems or work through tasks. These systems adjust and adapt to new information. This process is meant to imitate human intelligence.

Algorithm: A list of specific rules or instructions. These help a computer system perform a task or solve a problem.

Machine Learning: This is a field within AI. It refers to the process of using data to produce models that can perform complex tasks. The computers can then “learn” from the data, without more programming. 

Learning Language Model/Large Language Model (LLM): A language model is a type of machine learning model. It uses math to predict the next word in a series of words. It can also help fill in the missing word in a phrase. An example of this is the autocomplete function on a cell phone. A LLM learns language patterns. It does this by training on a massive amount of data. This allows the machine to recognize the patterns. LLMs can be used for both writing and translation. They are also used to answer questions, like on a chatbot.

Generative AI (GenAI): This is an LLM that can create new content. GenAI can make text, images, even videos and music. It learns patterns from existing data. GenAI then uses those patterns to create new and similar data. This technology is what most people know about. GenAI is relatively new and changing daily.

Prompt: This refers to the information you feed into GenAI. This can be a sentence, question or other information. The AI model will use this information and its pattern models to generate a response. 

Additional Resources

• Harvard University’s Information Technology Department has an article with helpful tips on how to write better AI prompts
• If you are using AI to innovate new products or technologies, the U.S. Patent Office has published Guidance for AI-assisted Inventions that will help you determine if your invention can qualify for a patent
• Read about what the public thinks are the most common potential AI harms and risks from the National Telecommunications and Information Administration’s AI Accountability Policy Report
• Stay up to date with U.S. government actions related to AI

© U.S. Small Business Administration