How AI Can Help Small Businesses

AI can help small businesses save time, reduce costs and make better decisions by automating repetitive tasks, improving customer responsiveness and analysing data to highlight patterns and risks. Used well, AI supports founders and small teams without replacing human expertise or judgement.

How AI Is Widely Used

Artificial intelligence is no longer experimental. It is already used across businesses of all sizes, including small and medium-sized enterprises.

Research indicates that 88 percent of businesses reported that at least one business function regularly uses AI. This has increased from 78% in 2024.

The research also mentions that for this to be successful, workflows would need to be redesigned. This means businesses see true value when it is successfully adapted into processes rather than used as a standalone tool. 

The first step toward successfully integrating AI into small businesses is to use it to reduce admin, increase response speed, or analyse performance data.

Reducing Admin and Freeing Your Time

Administrative work is one of the biggest time consumers for small businesses. Tasks such as managing emails, preparing documents, processing invoices, and taking meeting notes are necessary but limit the time available for strategy and growth.

AI tools can support these everyday activities by:

• Drafting and summarising emails and documents
• Transcribing and condensing meeting notes
• Extracting key information from forms or files
• Automating repeatable steps across systems

Microsoft defines artificial intelligence as technology that mimics aspects of human intelligence, such as learning and problem-solving. In practice, this enables AI tools to support everyday business tasks that would otherwise require significant manual effort.

For small teams, even small time savings add up quickly, especially when AI is applied to daily or weekly tasks.

Improving Your Customer Experience

Speed and consistency matter to customers, particularly for small businesses where relationships are often personal, and trust is built through direct communication. Delayed replies, missed enquiries, or inconsistent information can quickly undermine confidence, even when demand is strong.

AI can help small businesses improve responsiveness by supporting how enquiries are managed day to day. This might include capturing and organising incoming messages, helping organise queries to the right person, or reducing the risk of requests being overlooked during busy periods.

Research into how businesses are using AI shows that many are applying it across customer-facing and operational functions to improve efficiency and service delivery. Alongside this, the UK government’s guidance on using artificial intelligence in business emphasises the importance of adopting AI responsibly, with people remaining accountable for decisions, judgment and relationship-building.

Used in this way, AI supports faster, more consistent communication without removing the human element, allowing small businesses to scale their responsiveness without increasing headcount at the same pace.

Using AI to Support Decision-Making

Decision-making for small businesses can be time-consuming or based on limited available data. AI can help by analysing existing information and highlighting trends, risks or anomalies that are easy to miss.

Practical examples include:

• Reviewing historical sales or bookings to identify patterns
• Flagging unexpected changes in cash flow or costs
• Summarising performance data into clear insights
• Supporting basic forecasting and scenario planning

AI can help by identifying patterns in historical data, allowing businesses to respond faster and with more confidence.

Importantly, AI does not replace judgment but supports it. Founders and leadership teams still decide what action to take, but with clearer signals and fewer blind spots.

This is particularly valuable for early-stage and growing businesses, where leadership capacity is stretched, and decisions have an outsized impact.

AI Integration Among UK Small Businesses Is Increasing

Small businesses in the UK are increasingly experimenting with AI, but most remain at an early stage. Although AI use is now widespread, adoption and impact vary significantly, particularly among small businesses.

Research found that 37% of small businesses are utilising AI, increasing from 20% the previous year. 

Similarly, another report states that 35% of small businesses are actively using AI technology. However, the report highlights a gap between adoption and impact, noting that just 11% of companies reported using technology to a great extent to automate or streamline operations.

This suggests the real opportunity for small businesses is not whether to use AI, but how to use it well, intentionally and safely.

The UK Government continues to position AI as a driver of productivity and growth, particularly for small businesses that combine technology adoption with skills development and support.

Where to Start With AI and How Can We Help

AI can help small businesses work more efficiently, respond faster and make better-informed decisions, but only when it’s applied thoughtfully.

The most successful approach is to start with one clear use case, measure the impact and expand from there. AI works best as a support layer, not a substitute for expertise, experience or leadership.

At Tramshed Tech, we support founders, startups and growing businesses as they explore and adopt new technologies in a practical, considered way. Through our workspaces, programmes and community, we help companies to build the knowledge, confidence and connections they need to grow sustainably and innovate responsibly.

Get in touch to learn more about our spaces, programmes and upcoming events.