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For all the attention large enterprise organizations get, small businesses have a tremendous impact. According to U.S. census data, companies with fewer than 500 employees make up more than 99% of all businesses. They also account for more than half of all economic and employment activity. This means it is time to unlock the transformative power of AI for small businesses.
Many of the most exciting artificial intelligence (AI) tools available today are targeted at larger companies. Sometimes, much, much larger. While some of that is by design, it doesn’t have to be this way. In fact, given the promise and potential of AI, companies that develop these tools should focus on how they can bring them to the small businesses that power such a significant portion of our economy.
We know it won’t be easy.
The Good (And Not So Good) Reasons Small Business Has Limited Access to AI
Unlocking the power of AI for smaller businesses isn’t just a matter of flipping a few switches in a tech solution. There are a variety of reasons why — some good and some bad — so much AI innovation has been focused on the top 1% of businesses.
Let’s start with one of the bad ones: the SaaS business model.
The economic and employment activity associated with large enterprise organizations is gigantic. Getting a big enterprise customer might be worth dozens or even hundreds of companies with fewer than 500 employees. For SaaS business models that depend on growing recurring revenue, often based on the number of employees or users, this model makes sense — at least for them. After all, think about how much easier it is for AI builders to target and service the Fortune 100 or 500 than it is to target millions of smaller businesses.
Although that may make sense from a pure business perspective, it keeps a growing class of buyers from benefiting from the innovation available to larger firms.
A second, less bad reason: Many AI tools are imagined as a way to solve big company challenges. For example, an AI chatbot that interacts with potential customers on your website and answers their questions sounds nice, right? But is it worth the large-scale investment for a company that sells $500,000 a month to a handful of customers? Probably not. Another example: Do organizations need an AI warehouse logistics solution if an employee can jog across their storehouse in 30 seconds? Again, probably not – or at least it isn’t worth the investment required.
While there’s obviously room for niche solutions, many of the limitations are driven by a lack of imagination. But there’s one area that’s ultimately challenging for smaller businesses to compete with…
The One Big Challenge for Small Business: Data
Larger organizations have one key advantage: data – usually, lots and lots of internal data, an incredibly relevant factor to AI.
Even more than just the sheer cost or the possible value AI could deliver to organizations, many tools simply aren’t a good fit if you don’t generate a lot of data from which to learn. For instance, it’s much easier to apply machine learning to a database with millions of customer orders across thousands of different product offerings. This large data set gives a recommendation engine a much richer data set to pull from.
It’s not just the initial setup, either. AI runs better when you are pulling in more real-time data. After all, how can a machine learn about predicted order flow if you’re not taking in hundreds or thousands of orders a day?
For small businesses, the lack of big data is a significant hurdle. But it doesn’t mean there aren’t solutions that can be applied to smaller organizations.
6 Ways Companies Can Cater AI to Smaller Businesses
Although there may never be an AI inventory solution for a small parts manufacturer, there are other areas where AI can serve smaller organizations well. It starts with solution providers and smaller organizations working together to consider their needs and then determine what’s truly possible. Here are just six ways AI companies can better serve small businesses:
1. Focus on finding solutions for more targeted needs
Instead of replacing a major part of the business, how can AI help streamline painful parts of your workflow? You may not be able to get a full AI assistant, but a tool that schedules meetings can be helpful even at smaller organizations.
2. Apply AI insights where internal data sources are not available
There’s an incredible amount of external data out there to drive AI insights. For example, it doesn’t require any internal data at all to leverage a recruiting process for small businesses that uses publicly available information to determine when a small business should reach out to a candidate.
3. Use AI to bring new expertise that a leaner team may not have
AI can also bring expertise that only an experienced team could deliver. For instance, an AI-driven programmatic ad-buying solution could supplement a team with more expertise on broader brand-building campaigns.
4. Be able to ramp up a solution quickly
Small businesses don’t have months to get up to speed. Instead, AI could help those businesses focus on consumer-friendly solutions that can get someone using their platform with very little ramp-up time.
5. Look for organizations that offer different pricing models
Traditional SaaS models are great for SaaS companies – but it’s not always the right model for smaller businesses that only see the top dollar amount on a long-term contract. A flat-rate or shorter-term contract – perhaps with on-off capability – can get people to opt-in to a more affordable, more practical AI solution much quicker.
6. Provide built-in support
You can’t support small businesses the same way you support large corporations. That means including tutorials and walk-throughs with the product is critical. Affordable, all-inclusive service and customization plans would also appeal to smaller businesses.
AI for Small Businesses: They Deserve the Power of AI
The next hire, sale, or customer experience touchpoints are all so important to small businesses. The impact of each on the budget of a small business, as a proportion of their expenditures, is enormous.
Enterprise organizations will always be able to make use of the latest and greatest AI technology. It’s time to apply that same energy to finding solutions for smaller businesses, the lifeblood of many communities across the U.S.
No, it won’t be easy. But by working together, we can help unlock the power of AI for small businesses.