There is a big disparity in what we hear is happening with AI and how we go about doing something about it (adapting to it). On the one hand, the internet is rife with articles that predict near-future scenarios of doom and gloom to golden utopias brought about by AI power, and on the other we see businesses go about their work as if nothing has changed.
I think this is because of sheer inertia, and a lack of a clear path of action for business owners – the doers that drive change.
I’ve spoken to many small business owners, and their responses fall into predictable categories. They range from ‘My business is not affected at all’ and ‘AI can’t do what we do’ to ‘We may need to do something, but we’ll wait to see how the world changes before we do anything’.
They think of AI as intelligent search – indeed I’ve seen many first implementations of business-related AI efforts simply target AI for extracting information from their business’s accumulated data, emails, chats etc. And many have adopted AI as an expert document or presentation creator.
This misses the mark by a large distance. In this article, I want to look at what capabilities AI will bring to small businesses, (which I define to be anything up to 50 people, without a dedicated IT function), what dangers they will present and how to solve them. I will then outline a strategy for small businesses to actively use AI to change their business, before changes are forced upon them.
AI Capabilities
Large language models (LLMs) are now capable of acting as autonomous agents that can independently execute multi-step workflows, control software interfaces, and use external tools to solve complex problems. They have evolved from simple chatbots into reasoning engines. And they don’t just ingest and spit out text; they can hear and see the results of their actions and use this to guide further actions.
They stand poised to do the work of skilled humans – work that was done well by people who had the necessary experience, can now be done by these machines.
So how can a small business take advantage of these capabilities?
Business Processes are the key
What makes any small business viable today? What stops someone else from stealing their clients? It is usually some kind of ‘friction’ – a difficulty that someone else will encounter when trying to steal their clients. Such ‘friction’ can be simple things (like location specific services, low cost of doing business), reputational (a high level of trust in a business) or specific knowledge (No one else can do it).
If we knew how a competitor would use Gen AI to overcome these barriers, maybe we can (A) protect ourselves better and (B) do something similar to make ourselves more competitive (i.e. steal business from others).
Avoiding physical constraints, such as location-specific service which AI is unlikely to help with, we are left with ‘low cost of dosing business’ (efficiency), building a reputation quality and incorporating deep and enduring knowledge into our business processes.
Business processes – how a business acquires and services its clients, are therefore the key that lets a business unlock its potential using AI.
Start with acquisitional processes. How does a new or existing client engage with a business to get some service? It could be a phone call, an email request or a physical visit. AI enabled business processes agents can now handle all of the above, and more.
Then move on to service processes – how the business schedules, performs and tracks its services. Again, AI can perform these services over many modes of engagement - -from the website, from an email or from phone apps specific to the business.
Once you have the list of processes – AI can not only help build these processes, but they can also execute them as well.
On acquisitional processes, you can have a chatbot (and soon, voicebots) that can listen to clients, offer solutions to their problems, and present them with options – the work that an experienced service person used to do. But they can do it 24/7 with no let-up in their quality of engagement, and they never forget any previous conversation with the client. This reinforces quality and efficiency.
On service processes, AI agents can now perform complex multi stage business processes which would have required document reading, knowledge about a business’s industry, and perform complex calculations and make binary yes/no decisions, carry out scheduling operations and in many cases perform the actual work (if the service itself is not in the physical world).
The latest batch of AI Enabled Business Process systems are designed to make it easy to do all of the above. A small business owner need not have any technical knowledge themselves. AI does the heavy lifting of understanding your business and then generating or adopting your business processes into browser or phone apps specific to the business. A simple ‘chatbot’ interface guides you through the process, usually within a few minutes building the backbone of a new AI enabled business.
Treasure in your documents
But how will such processor bots incorporate deep knowledge about a business’s services or offerings, which were acquired over many years?
Modern LLMs increasingly have detailed knowledge about a business area – but this serves only as a launching pad for providing the requisite knowledge. The real treasure is in your documentation – which may be technical documents (how to do technical work) , product manuals, or just instructions a business owner have written for its own personnel. These will be ingested by your processor bot to offer a level of engagement on day one that is sufficient, and which increases as more documents are uploaded over time. Modern LLMs can even learn from the decisions they made over time to reach levels of expertise that only expert level humans possess.
And such information is only used for your business – it never leaves your business.
Using AI – A Strategy for Small Businesses
How Small Businesses Can Harness Artificial Intelligence to Stay Competitive
Introduction
There is a notable gap between the widespread discourse about artificial intelligence (AI) and the practical steps taken by small businesses to adapt to it. While online articles swing between predictions of catastrophic disruption and visions of a utopian future powered by AI, many businesses operate as though nothing has changed. This inertia stems largely from uncertainty and the absence of a clear action plan for business owners, who are the real catalysts of change.
The Current Perception of AI Among Small Business Owners
After speaking with numerous small business owners, their perspectives tend to fall into familiar categories. Some believe their business is unaffected by AI, others doubt AI's ability to replicate their unique offerings, and many prefer to wait and observe how the world adapts before making any changes. Most view AI as a sophisticated search tool, with initial applications focusing on information extraction from accumulated data such as emails and chats. Additionally, AI is often adopted for generating documents or presentations. However, this approach fails to tap into AI's full potential.
AI Capabilities for Small Businesses
Large language models (LLMs) have evolved beyond simple chatbots, now acting as autonomous agents capable of executing multi-step workflows, controlling software interfaces, and utilising external tools to solve complex problems. These systems can reason, perceive the outcomes of their actions, and make adjustments accordingly. AI is now able to perform tasks traditionally handled by skilled and experienced humans.
The question arises: how can small businesses leverage these advanced capabilities?
The Importance of Business Processes
Business viability often depends on certain barriers or 'friction' that prevent competitors from poaching clients. These barriers can take the form of location-specific services, cost efficiency, reputation, or specialised knowledge. By understanding how competitors might use generative AI to overcome these obstacles, businesses can better protect themselves and enhance their own competitiveness.
Excluding physical constraints, AI's impact centres on efficiency, quality, and the integration of deep knowledge into business processes. The processes by which businesses acquire and serve clients are fundamental to unlocking AI's potential.
Acquisition processes involve how clients engage with a business, whether through phone calls, emails, or physical visits. AI-enabled business process agents can now manage all these modes of engagement. Service processes, including scheduling, execution, and tracking of services, are also within AI's capabilities, spanning websites, emails, or bespoke phone applications.
Once business processes are identified, AI can both assist in building and executing them. For acquisition, chatbots and voicebots offer continuous, high-quality client engagement and retain memory of previous interactions, enhancing both efficiency and quality. For service, AI agents can perform complex, multi-stage tasks requiring document analysis, industry knowledge, calculations, decision-making, scheduling, and—where possible—direct execution of services.
Modern AI-enabled business process systems are designed for ease of use, requiring no technical expertise from the business owner. AI handles the heavy lifting, understanding the business and shaping processes into accessible applications. Simple chatbot interfaces guide owners through setup, often establishing the backbone of an AI-enabled business within minutes.
Leveraging Documentation: Treasure in Your Documents
To incorporate deep, specialised knowledge about a business's offerings, AI systems rely on documentation accumulated over time. While LLMs possess substantial domain knowledge, real value comes from technical documents, product manuals, and instructions written for internal use. By ingesting these documents, AI processor bots can provide immediate, informed engagement, with expertise growing as more documentation is added. Over time, AI systems can learn from past decisions to achieve expertise comparable to seasoned professionals.
Importantly, this valuable information remains within the business, safeguarding proprietary knowledge.