Artificial intelligence (AI) is a hot topic, with tools like ChatGPT making headlines for their ability to assist individuals. But for small businesses, the real challenge is how to effectively leverage these technologies to streamline operations, enhance efficiency, and drive growth. Unlike large enterprises, which can afford extensive AI deployments or even build out their own models, small businesses need to take a more strategic approach to AI adoption. While large companies may have more resources to invest in cutting-edge AI, small businesses can also tap into these tools—often reaping even greater benefits.
AI is becoming a game-changer for small businesses, offering opportunities to scale more efficiently by optimizing everyday tasks, improving customer interactions, and using data-driven insights to stay ahead of competitors. However, to fully unlock the potential of AI, small businesses must adopt a cloud-based tech stack. SMBs without cloud-enabled data infrastructure miss out on these advantages, as AI tools largely rely on cloud-based data to generate actionable insights. The key lies in understanding the specific AI tools available, how they can be applied to different operational areas, and the long-term value they offer. In fact, according to this 2024 Shopify SMB report, 97% of SMBs plan to incorporate AI into their business operations in the near future, and many are in the midst of learning how to harness AI’s potential.
How Day-to-Day Work Is About to Change
Small businesses often get bogged down by repetitive tasks like inventory management, invoicing, and customer communication. These are perfect candidates for AI automation, freeing up owners to focus on what truly matters: growing the business. By automating these tasks, businesses not only save time, but also reduce the likelihood of human error, which can be costly. Additionally, automating workflows increases consistency across operations, which can improve customer satisfaction and help build trust in the brand. In fact, Gartner predicts that by 2028, at least 15% of day-to-day work decisions will be made autonomously by AI agents, up from 0% in 2024. This shift promises to transform how small businesses operate, allowing them to optimize workflows and make smarter decisions.
Companies like Intuit are already developing AI tools that help small businesses streamline operations. For example, Intuit’s QuickBooks uses AI to automate accounting processes, enabling business owners to focus on strategy rather than mundane administrative tasks. This not only improves accuracy in financial reporting, but also helps business owners predict cash flow issues, manage expenses more effectively, and optimize profit margins. These AI-driven insights can help small businesses make more informed decisions, streamline processes, and improve financial management.
AI is also reshaping customer relationship management (CRM). AI-powered CRMs provide deep insights into customer preferences, enabling businesses to offer personalized experiences at scale—something that was once only possible for large enterprises. For instance, AI can analyze customer buying patterns and recommend personalized product offers or suggest optimal times to reach out to customers. This level of precision allows small businesses to nurture relationships more effectively, turning casual buyers into loyal customers. Now, small businesses can use this technology to better compete in the marketplace.
Getting Better at Predicting What’s to Come
Today’s AI tools offer a wide range of functionalities that significantly enhance efficiency for small businesses. In addition to streamlining operations, AI can also offer predictive insights that help business owners make better decisions for the future. Whether it’s predicting customer demand, optimizing inventory levels, or even anticipating market trends, AI tools are becoming critical for future-proofing business strategies. And looking ahead, AI will only grow more integral to their operations. In the near future, Gartner also predicts that AI agents will start autonomously monitoring and managing systems, taking on more complex tasks. This evolution will allow small businesses to scale without needing to constantly expand staff, thereby reducing overhead and increasing profitability.
For small businesses considering AI adoption, the first step is to evaluate where AI can have the most impact. Start by identifying repetitive tasks that drain time and resources—these are usually the easiest to automate. It’s also essential to assess which areas of the business are most affected by inefficiencies, whether it’s customer service, supply chain management, or marketing. AI can offer specific solutions that address these bottlenecks, helping businesses operate more smoothly. Then, look for AI tools designed specifically for small businesses, such as inventory management systems or CRM platforms that offer AI-driven insights and automation.
It’s also crucial to onboard new technologies properly. Preparing your team for AI adoption and ensuring they understand how to use these tools is essential to setting your business up for long-term success. This might include providing training sessions or designating a ‘tech champion’ within the team to lead the transition. The right implementation strategy can make the difference between a successful AI integration and one that struggles to deliver results.
Why the Competitive Edge AI Offers Will Be So Steep
AI offers small businesses a powerful competitive edge by automating routine tasks and enabling smarter decision-making. This allows them to operate more efficiently, respond quickly to market changes, and deliver superior customer experiences. According to a recent report from McKinsey, the most significant increase in AI adoption from 2023 has been in marketing and sales, where usage has more than doubled. This trend highlights how AI helps businesses rapidly adapt to shifts in consumer behavior, supply chain disruptions, or other market conditions—factors that can determine the success or failure of a business. Small businesses that adopt AI early will be better positioned to thrive in today’s increasingly competitive landscape.
The AI tools available today—and the more advanced ones on the horizon—are poised to revolutionize how small businesses operate, making it easier to scale and compete with larger companies. By identifying key areas where AI can make the most impact, adopting the right tools, and preparing your team for the transition, you can use AI to streamline operations and grow more efficiently. For example, AI-powered tools can help small businesses experiment with new business models, test pricing strategies, and even optimize marketing campaigns—all with minimal risk. As Gartner predicts, the rise of AI agents and autonomous decision-making will redefine the business landscape in the coming years. Now is the time to embrace these technologies and secure a competitive edge in the marketplace.
Kristjan Vilosius is the Founder and CEO of Katana Cloud Inventory. Katana is a cloud-based software helping thousands of businesses manage their inventory, production, accounting, and reporting in real time — giving businesses everything they need to get their products to customers as soon as possible. Since 2017 and led by Kristjan, Katana’s founding team has raised over $51 million in funding and scaled its team of 6 to over 150 employees across Europe, North America, Asia, and Oceania.
Small business stock image by VideoFlow/Shutterstock
