In today’s digital realm, the use of generative AI can be used for anything ranging from completing menial tasks to generating solutions for complex and intricate challenges that were previously extremely difficult for humans to solve. This is because Artificial Intelligence represents the most intelligent parts of humanity without its one fault: the human error. However, this cutting edge technology is not just meant for massive tech conglomerates, but for all people – in particular, small businesses. Today, many questions pose as to the capabilities of generative AI in helping small businesses. For example, what aspects of small businesses can AI help? How would this impact the customer service of small businesses? What is the extent of the repercussions of AI? Today, artificial intelligence creates many routes into the world of small businesses.
What Aspects of Small Businesses Can AI help?
One of the most compelling aspects of Artificial Intelligence is its ability to execute creative processes that would usually take extraordinary amounts of time in very short time with impressive results and low cost. This ability can be applied to many aspects of small businesses, for example, marketing. If a small business wanted to launch a new marketing campaign to raise attention for a new product or service they were launching, instead of paying hundreds or thousands of dollars to a third party, they could simply use 3rd party generative AI platforms to make it for them. This can be seen with the creation of new generative AI platforms such as Sprout Social, which uses a feature called “Social Media Scheduling” where captions and post ideas are automatically generated based on given information and details about the desired marketing campaign..Another example of this can be with customer service. Nearly 92% of hiring small businesses can’t find the labor they need, causing their customer service to become degraded (Furniture Today 1). In this situation, they could potentially use Artificial Intelligence in the form of an online chatbot to provide instant answers to customer’s online queries, helping them save on labor costs and extend their brand. Such technologies already exist, like the platform Chatfuel AI. Chatfuel AI uses Chatbots backed up by an AI powered knowledge base that has the ability to answer customer queries for nearly any given business. These are just two of the many examples of the many potential real life uses of generative AI in small businesses.
What Impact will This Have on Small Business Microeconomics?
The impacts of AI usage on the microeconomics of small businesses would be widespread. The money that they save from the usage of generative AI could be better applied to other areas of their business. For example, extending on the previous example of marketing. According to the Small Business Administration (SBA), on average, businesses spend about 1.08% of revenue on advertising (Centier Bank 1), with variations by industry. This 1.08% revenue could be put towards better use since 29% of small business owners say they are uncertain about being able to pay back their business loans, and 64% say they need more money to fund future expansion(Nerd Wallet 1). Additionally, the implementation of AI chatbots, would not only save money on labor costs, but it would allow small businesses to harness the power of data analytics to analyze customer trends to personalize their products, increasing customer satisfaction and overall business growth.
What are the Repercussions of AI Usage on Small Businesses?
The use of Artificial Intelligence also has a variety of risks associated with its implementation. The collection and analytics of data in Artificial Intelligence would raise security or privacy concerns, because third parties having access to that data would violate both customer trust and legalities with the government. Along with this, the initial investments and implementation with AI, which ranges from $5,000-$30,000 on average (Ever Efficient AI 1), could take a massive financial toll on some small businesses. This would have degrading consequences for destitute small businesses who already have financial strains. There is also the concern of AI taking over jobs of actual people, since the usage of AI in small businesses would replace the need for manual labor in businesses. Although this would save money for the business, it would have horrendous impacts on individual workers. While this is true, it is also essential to consider that the implementation of AI would also open new jobs, since computer science and engineers are required to create and implement AI systems. This illuminates how the usage of AI has both positive and negative effects on a multitude of aspects of small businesses.
Effective Usage
The usage of generative AI in the growth and development of small businesses seems to contain promise and potential for the future. With its applications having the ability to completely transform certain areas of businesses such as marketing, creative design, and customer service, generative AI can prove to be one of the greatest beneficiaries of small businesses. However, it is important for small businesses to keep in mind the side-effects of AI usage, such as the burdening financial strain, negative impact on human capital, and cybersecurity and data concerns, or the drawbacks can easily outweigh the benefits for future use.
