Has AI levelled the playing field for SMBs?

Artificial Intelligence (AI) is the term on everyone’s lips right now, but its ability to transform small and medium-sized businesses (SMBs) across all industries is not in doubt.

For those small and medium-sized businesses (SMBs) looking to grow fast or challenge their bigger competitors, AI opens up a wealth of options. These range from boosting productivity, reducing costs, and researching or identifying commercial opportunities for the future, even when it’s not necessarily obvious to the business owner.

But with so many AI options on the table, it may be sensible to start small, according to Steve Salvin, founder of British AI and data company Aiimi.

“The process for investing in AI should be similar to processes for spending budget elsewhere; focus on areas where there is a clear need and where there will be a return on the investment,” he advises.

However, with AI only as good as the data that goes into it, Salvin suggests leaders get “relevant data sets in order” first before beginning on this journey. That means understanding where data is stored, who has access to it, knowing what documents contain, labelling files properly, and authorizing access only for people who need it – while also only authorizing AI access to data sets where it is appropriate.

“Start small and stay focused on improving data quality in the areas you need it most. Knowing what questions you want to answer with AI will give you a narrower field of vision to seek out the data that matters most,” Salvin adds.

Paula Panarra, general manager, UK&I at Avanade, believes “AI is an inspiring force for innovation” throughout the SMB ecosystem.

“When it’s combined with human insight, it can spark creativity and strategic insight, rather than diminish critical thinking,” she explains.

It’s also critical to evaluate how AI will align with the company’s strategic direction, according to Pannara.

“Ensuring [you have] the right infrastructure and that a supportive culture is in place is very important. This will help create the conditions for AI to become a powerful driver of growth and innovation for their organisation,” she says.

Reducing manual toil

AI is important for reducing ‘toil’ and freeing up valuable time to grow, then move from there to its deeper application to support decision making, according to James Bergin, executive general manager of technology research and advocacy at cloud accounting platform Xero.

Research of 300 UK small businesses carried out by Xero showed 57% saw AI as at least moderately important to remain competitive. However, those same businesses also reported that there is still a gap in the time and money available for AI rollout.

“Often the quickest wins come from automating repetitive, admin-heavy tasks like entering, sorting, and filtering data,” Bergin says. “But AI is also a powerful tool that can unlock insights buried in that data and can help with spotting trends, opportunities, and challenges. Try working backwards from the problem you want to solve by exploring what slows your business down or what capabilities you wish you had.”

Bergin additionally warns: “Your approach should be purposeful and ensure adoption is tempered with the human touch, especially since small businesses are the hubs of our communities and thrive on personal human relationships.

“You must carefully navigate the broader ethical and practical risks that come with embracing AI. Small businesses need to keep pace with new regulations governing data use and protection, ensuring AI usage is transparent and ethical.”

AI has the potential to level the playing field for SMBs when it comes to e-commerce, according to Deann Evans, Shopify’s EMEA managing director. This could be across inventory forecasting, image and product descriptor creation, customer acquisition, and personalization.

“It can even help businesses expand into new markets faster by easily localising content and pricing, helping them to connect with local customers sooner,” she says.

“With lean teams and limited resources, SMBs have previously struggled to compete with larger players. But these tools can unlock efficiencies internally and drive greater customer personalisation without the need for large budgets or in-house teams.”

Evans adds: “To exceed consumer expectations, commerce-based SMBs need to integrate AI and adopt a unified commerce approach – one that connects their data, channels, and tech stack to create a single operation with one view of the customer. AI provides the agility to scale with precision, building lasting customer relationships.”

Work smarter, move faster

The list of use cases for SMBs and AI is long, from payroll management to content creation to compliance checks to flagging fraud. It can also run customer service operations, using AI agents as the first-point of interaction for customers, quickly answering common queries and saving on phone waiting times.

DK Sharma, COO at Kore.ai, is another who sees AI as the solution for SMBs to “work smarter, move faster, and focus more energy on growth”.

But he explains: “AI creates impact only when the right foundations are in place. Start with specific, measurable use cases that can deliver quick wins. Teams should also be digitally comfortable and open to change, with leadership fostering a culture that welcomes new technology. AI should be treated as a long-term strategic investment, not a quick add-on; scale gradually once results prove reliable.”

He also advises having “clear exit strategies” when AI implementation doesn’t work as expected, so underperforming projects can be wound down quickly. But, importantly, Sharma adds that each instance can be seen as a learning experience and that “every failed pilot should sharpen the next attempt.”

Understanding AI terminology is another vital issue for SMBs to get to grips with – from LLMs to RAG to Generative AI. As such, working with the right third-party experts to know which models and AI technologies to introduce is a paramount first step for those SMBs without their own in-house IT knowledge.

This becomes especially critical with cybersecurity. Indeed, AI rolled out or embedded badly can open SMBs up to threats from hackers or criminals, and that can prove costly, stifling, or reversing the gains and progress made by the initial AI implementation.

However, with the right guardrails in place, the possibilities are endless.

One example would be Score, which uses AI to turn visual data into visual intelligence. This was something Maxime Sebti, Score’s co-founder, says was “once reserved for the largest enterprises”.

“One of the most exciting areas is computer vision, teaching machines to see and understand the world through images and video,” he says.

“For SMBs, this opens up possibilities that were unimaginable a few years ago. A small manufacturer can now spot defects in real-time without paying a large inspection team. Retailers can analyse customer behaviour in-store, helping them optimize layouts and staffing. Even service businesses can use visual intelligence to monitor safety, compliance, or equipment health with a fraction of the resources of bigger competitors.”

Making every hour count

More than one-third (35%) of SMBs already use AI for emails, according to research from VistaPrint. Furthermore, 29% have harnessed it for customer service, and 34% credit it with improving efficiency so they can focus on growth.

Some 40% now have AI to track what their competitors are doing, and, overall, 84% of SMBs view AI as having made a “positive impact”.

This positive attitude towards AI can also be found in other areas, such as human resources. The importance of efficiency gains for SMBs cannot be underestimated, according to Laura Fink, director of people and culture at HR platform HiBob, who stresses that for these smaller businesses “every hour and every person counts”.

AI can now be harnessed for employee onboarding, reporting, generating interview questions, and building training schedules, she explains, “unlocking more time and energy to strengthen culture, engagement, and performance”.

This makes hiring not just faster, but also fairer, according to Fink.

“Its real value is in clearing away the admin so managers have space to lead with clarity and employees can focus on the work that matters,” she says. “That’s how SMBs can match – and even outpace – bigger competitors.”

Cassie Petrie, managing director of SMB, EMEA at SAP Concur, suggests SMBs consider AI plans in detail before getting underway.

“AI implementation cannot be successful if it is not thought out,” she says.

“Rushing to adopt the shiniest new AI tool will likely lead to failure and disappointment if it isn’t adapted to the business’ needs. It’s critical the business follows a structured deployment process to ensure employees can get up to speed. A phased approach may alleviate initial pain points.”

Petrie also advises the simplest way to begin is by “emphasising its positive impact” on an SMB’s workforce.

“Involving employees from day one and providing training sessions will help them feel confident in the technology,” she adds.