In the modern world, small businesses exist under the pressure of their bigger competitors, which makes their life and development much more complex and stressful. Starting and running a small business demands a lot of energy, courage, and time, and the fear of failure is always present.
Statistical records say that over 20% of small businesses fail in their first year, and approximately 50% fail and close sometime throughout their first five years. But, many business owners don’t know about the advantages of utilizing artificial intelligence. AI can solve some problems small startups and businesses face and increase profit. For example, AI can significantly improve customer service.
There are several specific problems small business owners face. Currently, AI won’t be able to solve all of them, but it can make running a small business much easier. You can also read “5 Benefits of AI for Business ” to get some new insights.
What Challenges Do Small Businesses Face?
The number of small businesses is growing rapidly, so now is the best time to have or start a small business. However, people who plan to start a small business or already have one may face several problems. These challenges include:
- Lack of funds
- Lack of time
- Difficulties finding qualified employees
- Balancing business growth and good/service quality
- Ineffective web and social media presence
- Attracting customers Increasing brand awareness
- Financial planning
- Workflow management
Unfortunately, AI cannot solve all businesses’ financial problems. However, it can win its owner and employees plenty of time by overtaking some of their responsibilities. Business owners can apply AI in various fields, such as customer service, marketing, or cybersecurity. This article will explain how AI benefits small businesses in each of these domains.
How Can AI Help in Marketing?
AI can help businesses create their Content Marketing strategy. Content marketing aims to attract new customers, engage followers, and increase brand awareness through social media posts, blogs, e-mails, e-books, etc. Hence, AI utilizes specific algorithms to analyze the existing data and define the most popular types of content. Additionally, thanks to the conclusions AI draws, choosing keywords, posting frequency, and topics for future posts becomes less complex.
Moreover, AI can understand the target audience better than a human. Thanks to Big Data, this technology can collect people’s behavior regarding various topics, emotional tendencies, and needs by analyzing comments, likes, shares, and any activities on social media or websites.
Therefore, AI can provide small businesses with accurate information about their customers. As such, business owners will have many opportunities to gain a competitive advantage. Small businesses utilizing AI can understand their target audience better than their non-AI-using competitors. This allows them to plan more accurate marketing campaigns and use targeted marketing more effectively.
How Can AI Improve Customer Service?
The chatbot is the most popular AI tool for communicating with existing and potential customers. It is a part of every customer-oriented website, mobile app, and phone call. Nowadays, life is fast, and customer service has to adjust to this tempo. Chatbots can facilitate less time-consuming and more effective communication.
Another way to bring customer care to a higher level is to create a convenient and practical in-store and online shopping experience. AI can help with both of these shopping aspects. For example, in the case of offline stores, AI can provide personalized recommendations, and information about the suggested products, direct clients, and streamline decision-making. In terms of buying things online, AI can perform the same functions via a personal computer or smartphone – show personalized suggestions, discounts, and loyalty points and significantly fasten the process of online shopping. As such, AI helps customers save precious time.
How Can AI Help In Cybersecurity?
People cannot always notice suspicious cyber activity. On the other hand, AI can do it. Moreover, it can disclose undefined or potentially harmful actions before they become big problems. The most common ways AI deals with cybersecurity are:
- Phishing detection
- Network Security
- Vulnerability management
- Behavioral analytics
- Prevention control
The most popular AI software for cybersecurity is Darktrace and BluVector.
In this matter, AI is better than traditional tools for data protection as it tends to respond to any possible data breaches more effectively because of its automated features. An important fact is that AI can de-anonymize various types of personal data in large data sets. Hence, if a small business receives anonymous threats, AI can help deal with them. You can learn more about AI in Cybersecurity in the article The Impact of AI in Enhancing Traditional Cybersecurity.
How AI Boosts Revenue?
All the mentioned functions of AI help save a lot of time for employees. Hence, more tasks can be completed in less time, which enhances productivity. Since AI overtakes the mentioned above functions, small businesses can hire fewer people and save money. A great example of spending less is Netflix. In 2017, the company saved nearly $1 billion by implementing machine learning methods.
One more machine learning method that helps businesses grow is forecasting sales. AI analyzes tons of data, including text messages, phone calls, purchase histories, emails, and CRM data. After that, a specific algorithm based on the collected information accurately predicts the company’s future sales.
Moreover, AI can predict future sales and generate numerous forecasts related to logistics, the demand and supply balance, and inventory prices. The most crucial factor is that AI works fast, expediting the decision-making process.
Many small businesses fail because they are not cost-effective. This problem can be solved by machine learning. AI calculates optimal costs for a good based on all the crucial factors, such as price history, brand awareness, season, reputation, quality, or operating costs. Therefore, optimal prices attract customers, create a competitive advantage, and allow businesses to generate maximum profit.
As mentioned earlier, AI provides small businesses with more effective marketing strategies. Additionally, it instills a better understanding of the target audience, which is a crucial element of targeted marketing on any social media. Therefore, it boosts sales by attracting new customers.
Are There Any Drawbacks of AI Utilisation?
Despite all the positive qualities, AI possesses several drawbacks as well. For example, the efficiency of machine learning algorithms depends on the quality and quantity of data these algorithms are trained on. Some companies faced situations in which AI’s results and behavior were unpredictable and confusing.
For example, some chatbots occasionally started implementing racist insults and obscene language while communicating with customers. This happened after some users texted these chatbots in foul language for the sake of a joke, and AI overtook their communication style.
Moreover, there are cases when AI classifies people or objects wrongly. Hence, these mistakes vary from insulting, like telling a 30-year-old woman she is 70, to humorous, such as mistaking a toddler for a burrito. AI can only be as intelligent as its algorithms and training data allow it to be.
Hence, small businesses should estimate the pros and cons of AI utilization, but machine learning methods could benefit business owners in many ways.