Yoni Cohen
BusinessHeroes Staff

Adopting AI is increasingly reshaping the landscape for small business owners. The Small Business and Entrepreneurship Council (SBEC) reports that 93% of small business owners view AI tools as cost-effective solutions that drive savings and bolster profitability. 

In an effort to clarify AI’s impact, we conducted a survey that revealed more than half (55%) of U.S. small businesses experienced a boost in profitability after implementing AI tools. Results further indicate that AI adoption has enabled small businesses to not only thrive but also find a competitive edge.

We’ve reviewed our survey findings alongside data collected by respected organizations like the SBEC and the U.S. Chamber of Commerce to uncover how AI for small businesses can streamline operations and support growth, even amid tight labor markets and rising operational costs. 

Additional Findings:

• AI is driving significant productivity gains for small businesses, with 61% reporting increased efficiency. (BusinessHeroes.com, 2024)
• Accounting and customer management are the most popular applications of AI in business operations, according to 48% of small business owners. (Bipartisan Policy Center, 2024)
• The trend toward AI adoption is accelerating, with 49% of small businesses planning to implement AI tools. (U.S. Chamber of Commerce, 2024)
• Uncertainty caused by the knowledge gap about AI capabilities is the number one roadblock keeping 77% of small businesses from adopting AI tools. (U.S. Chamber of Commerce, 2023)
• Having the opportunity to reallocate resources to higher-value tasks is the biggest perk of implementing AI, according to 41% of small business owners. (SBEC, 2023)

55% Find AI Is Driving Profit Growth

As we mentioned, a 55% majority of small business owners currently using AI tools reported experiencing an increase in their profit margins after implementing AI tools. These findings align with a recent Bipartisan Policy Center (BPC) study, which found that 54% of small businesses believe AI contributes to business growth.

The BPC also noted that 53% of small businesses they surveyed saw a positive impact on customer experience. This suggests AI may be indirectly contributing to profit growth by improving customer satisfaction and loyalty.

While almost 40% of our survey respondents reported no noticeable change in profit margins so far, this doesn’t necessarily indicate a loss. Instead, it highlights that many businesses are still in the early stages of their AI journey, with returns potentially yet to come. 

Importantly, only a minimal 3% experienced any decrease in profits, underscoring that the potential rewards of AI adoption significantly outweigh the risks for most small businesses.

Overall, the data paints a clear picture — AI tools offer a powerful opportunity for small businesses to enhance their profitability.

61% of Small Businesses Report Increased Productivity With AI

AI is not only boosting profits but also supercharging productivity for small businesses. A significant 61% of respondents reported an increase in productivity, with 17% seeing a significant boost, 17% a moderate increase, and 27% a slight improvement.

This surge in productivity can be attributed to the efficiency gains enabled by AI tools. By automating routine tasks and providing data-driven insights, AI frees up employees to focus on higher-value activities. In fact, Raymond J. Keating, chief economist at the SBEC, estimates that AI-powered automation could save small businesses a staggering 6.33 billion hours each year, resulting in about $273.5 billion in annual savings.

The Bipartisan Policy Center found that 48% of small businesses use AI for core functions like accounting and customer management, demonstrating the growing value of AI for operational efficiency. By automating repetitive tasks, AI frees up valuable time and resources, allowing businesses to focus on strategic initiatives and customer engagement. 

The relatively small percentage of businesses (3%) that reported a decrease in productivity underscores the great potential of AI to drive such efficiency. However, the 12% who experienced mixed results highlight the importance of strategic implementation and ongoing evaluation to maximize the benefits of AI.

49% Small Businesses Planning to Adopt AI Tools

The trend toward AI adoption is accelerating, with 40% of small businesses already exploring AI tools and another 49% planning to do so, according to the Small Business Index (SBI) published by the Chamber of Commerce and MetLife. It's clear that many small businesses no longer see AI as an abstract futuristic concept but as a practical tool for enhancing business operations.

Our survey also identified a growing interest in AI among small business owners, with 65% having adopted AI tools within the past year. When asked how long they’ve been using AI tools in their business, owners reported:

• Less than 6 months - 36%
• 6-12 months - 29%
• 1-2 years - 25%
• 2-3 years - 7%
• More than 3 years - 3%

These findings also illustrate how many businesses are still in the early stages of AI adoption, with only a small percentage using AI for more than three years. This highlights the need for continued education, support, and accessible tools to help businesses fully leverage the power of AI.

The SBI also notes that Gen Z and millennial-owned small businesses have taken a slight lead in the charge toward AI adoption. Forty-five percent of Gen Z and millennial business owners have already experimented with various AI tools, compared to 42% of Gen X-owned businesses and just 27% of businesses owned by baby boomers and older generations.

That slight generational divide widens when we look at their plans for the future. While 15% of Gen Z and millennial business owners and 25% of Gen X business owners anticipate no future AI implementation, 45% of baby boomers and older-owned businesses are planning to avoid AI.

It remains to be seen, but early adoption of AI may give younger business owners a competitive edge as they can leverage AI to streamline processes, improve customer experiences, and make data-driven decisions. Older generations, on the other hand, may need more education and support to overcome any hesitation or resistance to AI adoption.

Knowledge Deficit Is the Main Challenge for Small Businesses in AI Adoption 

Lack of knowledge is a major hurdle in the widespread adoption of AI by small businesses. 

A 2023 Chamber of Commerce study revealed that a substantial 77% of businesses have not adopted AI due to insufficient understanding or uncertainty about its potential. More specifically, 39% said they don’t see how AI would help their business and 38% said they don’t know enough about AI to feel confident about implementation.

This data aligns with our findings when we asked “What are the primary obstacles you have faced in adopting AI tools?” The most popular response chosen by 31% of respondents cited “lack of knowledge or expertise” as the primary obstacle they’ve faced in adopting AI tools. 

The ramifications of this knowledge gap are seen in the findings of a recent Forrester survey, which revealed that one in seven businesses may give up on AI completely in 2025 upon realizing that they don’t have the skills, training, and infrastructure to capitalize on AI tools. 

The need for education and awareness initiatives to demystify AI and showcase its practical applications for small businesses is clearly urgent now.

Twenty-five percent of small business owners are also concerned about the costs associated with AI adoption, according to the Chamber of Commerce study. This suggests that the initial investment in AI tools, software, and specialized talent can be a deterrent for some small businesses, especially smaller ones with limited budgets.

Despite the challenges, the overall sentiment toward AI among small businesses remains positive. According to the BPC, 64% of small business owners believe that the advantages of AI outweigh the drawbacks. This optimistic outlook suggests that as the technology matures and understanding of its capabilities grows, more small businesses will embrace AI tools.

Benefits of AI for Your Small Business

As we’ve shown, small businesses are increasingly turning to AI to streamline operations and boost their bottom line. The SBEC reports that businesses leveraging AI are experiencing significant benefits, including:

• Redirecting resources: 41% of businesses are reallocating time and employee resources to higher-value tasks.
• Enhanced customer engagement: 39% are investing in innovative solutions to improve customer satisfaction and retention.
• Technological advancements: 37% are investing in new equipment and technology to drive efficiency.
• Price stability: 36% are able to maintain stable prices for customers.
• Growth opportunities: 34% are pursuing new growth opportunities.

Small businesses are also recognizing how AI skills are impacting the evolving job market. The Chamber of Commerce found that 65% of small business owners anticipate that AI will reshape future job roles, and 64% expect AI proficiency to become a standard requirement in job listings. As a result, 71% believe hiring AI-skilled employees will save time in the long run, while 67% anticipate cost savings.

The increasing integration of AI into small businesses is not only driving efficiency and cost savings but also reshaping the future of work. By automating routine tasks, analyzing vast datasets, and providing valuable insights, AI empowers small businesses to compete with larger organizations. 

Best AI Tools for Your Business

Ready to unlock the potential of AI and join the growing number of small businesses leveraging this powerful technology? Perhaps your to-do list includes:

• Starting an email marketing campaign 
• Figuring out how much it costs to build a website 
• Registering your domain name 
• Finishing an application for a business loan 

Navigating the extensive variety of AI tools and services can be overwhelming, but we’re here to help. Follow these tips to start your journey to finding the right AI solutions to meet your specific needs.

Take a step back and identify the areas where AI can impact your business most. Focusing on your core challenges will guide your search for the most relevant AI tools.

• Are you looking to automate marketing campaigns? Try HubSpot or Constant Contact. 
• Want to streamline project management? Explore monday.com or ClickUp.
• Focused on improving customer relationship management? Look to Pipedrive or Salesforce. 

Remember: Rome wasn't built in a day. Don't try to implement a comprehensive AI solution right away. Begin with a few specific tasks and tools that address a clear need. As you gain experience and confidence, you can scale up and explore AI’s full potential of AI in your business.

Many AI tools are designed to be user-friendly, even for those without a technical background. Look for solutions that offer intuitive interfaces, clear documentation, and ongoing customer support. 

Companies like Wix, GoDaddy, and Hostinger offer website builder platforms with AI-powered features that are easy to use for beginners.

Consider how seamlessly the AI tool can integrate with your existing software and infrastructure. This will minimize disruption to your workflow and ensure easy data transfer.

Prioritize tools with robust security features and a strong commitment to data privacy.

Start Your Company’s AI Journey Today

The data we’ve shared makes it clear that AI presents a transformative opportunity for small businesses. From boosting productivity and profits to enhancing customer experiences and staying competitive, AI offers small businesses a powerful arsenal of tools for growth. While challenges exist, they are not insurmountable. 

By following the key steps outlined above and exploring the many AI tools explained on BusinessHeroes.com, you can unlock the potential of AI and propel your small business toward success.

Methodology

The survey of 413 small business owners was conducted via Centiment for BusinessHeroes on October 21, 2024. Sixty-eight percent of those surveyed indicated they currently use AI tools in their small business. All data is unweighted and the margin of error is approximately +/-3% for the overall sample with a 95% confidence level.

About Yoni Cohen

Yoni Cohen is a contributing writer and editor for BusinessHeroes.com. Yoni started out in journalism as a breaking news editor, but soon moved on to become a senior lifestyle and technology editor and has 15+ years of experience in creating content on topics that really matter to people.