How small businesses are approaching AI integration

Technology has given today's small businesses the capability to compete on a much larger stage. But taking advantage of that capability often involves overcoming new challenges, as is definitely the case with artificial intelligence.

AI holds enormous potential for small businesses, providing the type of tools that can empower them to do more with less and gain an edge over the competition. To unleash the power of AI, however, small businesses must commit to learning new skills and taking on new risks.

Small business leaders are navigating the challenges and optimizing the impact of AI in a number of ways.

Using AI to heighten efficiency

Greater efficiency is one of the core promises of AI and one that is highly attractive to small business leaders. By empowering automations across small business operations, AI can increase efficiency in ways that reduce costs while also streamlining processes to better serve consumers.

Chatbots are an example of an AI-powered efficiency multiplier that many small businesses are using. A 2025 survey found that 51% of small businesses have already integrated AI into their customer service operations, and that 74% of those are using it to power chatbots.

AI can also boost efficiency by helping small businesses streamline the sorting of incoming data. From email sorting to invoice processing to sentiment analysis, AI can make it easier to get information assessed and processed.

In the insurance industry, AI automations have been shown to reduce the time needed for underwriting without negatively affecting accuracy rates. A 2025 study showed AI shortened the average underwriting decision time from three to five days and to 12.4 minutes for standard policies, and maintained a 99.3% accuracy rate in risk assessment.

Small businesses that tap into agentic AI can further maximize efficiency by giving AI platforms the power to assess data and act on it. Whereas traditional AI chatbots might only be able to triage calls for a human customer support agent by gathering the details and directing customers to the next step, AI agents can take the additional step of processing payments or issuing refunds and sending follow-up emails once the task is completed.

Using AI to lower risk

Risk mitigation is another key function AI brings to small businesses. AI dramatically expands a business's data analytics capabilities, enabling it to mine insights that were previously available only to major corporations with teams of data analysts. As data is better understood, small businesses can tap into a higher level of decision-making that allows them to sidestep pitfalls and optimize performance and profitability.

AI can also empower small business tools that enhance the company's safety and security. These range from AI-driven cybersecurity platforms to data analytics tools that reduce equipment costs by supporting predictive maintenance.

Combining AI with the human component

As small businesses embrace automations that reduce the burden on — and sometimes the need for — human employees, it's important that they don't completely devalue the human component of their operations. While consumers like the "always available" efficiency AI empowers, 86% say empathy and human connections are still more important than a quick response

Relationship building, decision making, consulting, handling difficult customer service issues, and negotiations are all areas where the human component is essential. For those tasks, AI should be limited to a support role.

Small businesses stand to gain a lot from leveraging AI to improve their operations. The key to success, however, is intelligent integration. Knowing where AI can streamline operations and where it will only add friction is critical to getting a solid return on your investment.