However, a potential gap is opening up between the smallest businesses and their larger rivals – 60% of the medium-sized enterprises use AI tools at work compared to just 36% of micro businesses.
If we start from the premise that AI has the potential to help smaller business owners to thrive and grow, then this is a gap many would want to see bridged. It’s already challenging for micro businesses to compete with deep-pocketed rivals who can invest in technology, marketing, staff and more, so how do we make sure smaller business owners are enabled to both use AI and feel the benefits of adoption?
A new survey, commissioned for Start Up Loans and conducted by YouGov, found the biggest barriers to further AI adoption were IT security issues (25%) and a lack of appropriate financing possibilities (25%). Slow internet connection (22%) was the third largest barrier. There is also a knowledge barrier preventing many smaller businesses from reaping the full benefits of tech and AI in the workplace.
Finance and knowledge are two areas in which we believe Start Up Loans is well placed to support smaller business owners who want to use AI, and we’re already doing so, with businesses ranging from those centred around AI right through to business owners who have maybe used ChatGPT once or twice in their lives.
One purely AI-focused Start Up Loan recipient is Varun Bhanot, founder of Magic AI. His product is an AI-enabled mirror that can deliver personalised workout sessions, and even corrections to your form, by analysing what it sees. The technology is incredibly sophisticated, but Varun has also integrated AI into the business operations as well.
He commented: “The Magic AI product is reliant on artificial intelligence to interpret what it sees, process the information and then provide recommendations tailored to that data set. It results in tailored workouts and tips to improve form.
“As well as its use in the product, we use AI to manage customer service more efficiently. Our chatbot has transformed how we interact with customers, and improved customer service satisfaction at the same time. It saves us time, resources and lets us focus on things that will help us grow.”
Varun is a fantastic example of a founder basing his whole offering on AI technology, but businesses can benefit from AI applications even if they aren’t necessarily ‘tech’ businesses.
Gary Morgan, founder of Morgan’s Juice Bar and Snacks based in Chalk Farm tube station in London, doesn’t depend on AI but uses it to make working life easier.
Gary said: “When I decided to apply for a Start Up Loan, I had never written a business plan before. I consulted AI about that, which really helped with my application process. My business is a health-focused juice bar, but I have no previous experience working in hospitality. I now use AI to help me with things like food safety checklists, and also marketing copy and design. I personally recommend any business owner to use AI technology such as Chat GPT as a sounding board in the first instance – it really helps when trying to juggle so many different roles.”
Cally James, who has not yet adopted AI, is the founder of Hippy Hut Pottery, from Bury St Edmunds. Her business hosts workshops and hands-on ceramics classes at an intimate studio, as well as offering corporate events across the UK.
While Cally doesn’t use AI in her day-to-day work, she acknowledges its potential value in helping her manage and grow her business.
Cally said:“My passion is pottery-making and giving people the opportunity to embrace their creativity. Anything that helps manage the business side of operations is something that I’m interested in learning more about. I’ve been encouraged to explore how AI could help me manage bookings in the garden studio, and the planning that’s needed for larger corporate events, which will free up more of my time to grow the business and focus on the things I love doing.”
To bridge the AI gap, we need to have affordable finance for start up businesses to invest in technology and to provide high quality information so that smaller business owners, who often have to do everything in their business, know and have the confidence to use the new technology. Our recent research showed a third of smaller business leaders have only a basic understanding of AI and only 12% describe themselves as experts, and it’s in addressing these challenges where we believe Start Up Loans can really make a difference.
