You can’t turn on the TV or stumble across an article about the benefits of Artificial Intelligence. Large tech companies tout it as the next big thing. Most people see the advent of commercial AI services, li
An AI tech cloud hovering over an office
American Management Services
ke ChatGPT or Gemini, as a threat.
This year has seen a significant jump in layoffs from last year, with anywhere from 60,000 to 200,000 job cuts across the workforce. Tesla, for instance, laid off more than 10% of its workforce but has begun processes to hire 800 employees with an emphasis on AI and robotics.
While AI’s potential is vast, its practical applications and benefits for small businesses remain a contentious topic.
The Hype vs. Reality
Tech giants like Meta, Facebook, Google, and Apple portray AI as a magical solution that can automate processes, enhance productivity, and create new revenue streams. The media is replete with stories of AI-driven advancements, from self-driving cars to sophisticated algorithms that can accurately predict consumer behavior.
However, this hype often masks the reality faced by smaller businesses. While the promises of AI are alluring, the practical implementation and tangible benefits are far less clear for enterprises that do not have the vast resources of tech behemoths.
Small businesses, particularly those with revenues ranging from $4 million to $30 million, can find themselves overwhelmed by the barrage of AI marketing.
Despite the glowing endorsements from large corporations, these smaller entities often see little to no actual integration of AI in their daily operations. The gap between the potential benefits touted by AI proponents and the real-world applications for small businesses remains substantial.
AI Adoption Among Small Businesses
Despite the relentless promotion of AI by big tech companies, the adoption rate among small businesses remains remarkably low. I’ve had conversations with business owners who are not leveraging AI technologies. If they do use AI, they rarely put it to good use, utilizing it to help with simple tasks like content development.
This reluctance is not due to a lack of awareness but rather a combination of skepticism and practical constraints.
I liken this to the first-hand-held calculator. When released in 1972, it cost $400. Now, anyone with a smartphone has a calculator app built right in. Technology has to develop over time, and prices match the advantages.
We’ve had multiple AI consulting conversations about the best ways to implement it in our business. Outside of augmenting media content, we haven’t found much use for AI outside of small tasks. And even then, there is a lot of handholding to ensure the AI remains on task.
Many owners view AI as a tool for large corporations with extensive technical resources and expertise. They struggle to see how AI can be meaningfully integrated into their operations without substantial investment and disruption.
The idea of implementing AI can be intimidating, especially when coupled with the fear of obsolescence. Small business owners worry that adopting AI might require more time, money, and technical know-how than they currently possess.
This fear is exacerbated by the constant stream of AI-related marketing, which can pressure small business owners to invest in technologies they do not fully understand or need.
As a result, many opt to stick with their current methods, relying on human judgment and traditional tools rather than diving into the complex world of AI.
The Value of AI for Small Businesses
AI has been heralded as a transformative technology with the potential to revolutionize various industries. However, the extent to which AI can drive revenue and enhance productivity varies widely depending on the nature of the business and its specific needs.
Despite advantages like content creation—social media posts, blog articles, and marketing materials, there is skepticism about AI’s ability to generate significant revenue for small businesses.
While AI can streamline certain processes and offer new ways to engage with customers, the ROI for a $10 million contractor or a $4 million machine shop might not be as substantial as the hype suggests.
The true value of AI lies in its ability to augment human efforts rather than replace them entirely, helping small businesses operate more effectively within their existing frameworks.
The Reality Check: AI as a Tool, Not a Solution
AI is a powerful tool, but the reality for small businesses is more nuanced. It’s not the magic bullet for every owner.
The tech’s primary strength lies in its ability to assist with specific tasks, such as automating repetitive processes, analyzing large datasets, and providing insights based on patterns it identifies. No matter how “smart” it is, significant human oversight and intervention still need to be done.