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Five things for small businesses to consider about AI

AI in the Workplace

22 Sept 2025 (Last updated 11 Nov 2025)

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No longer just for high-tech companies and corporate giants, Artificial Intelligence (AI) is being actively used by small businesses to stay competitive, manage rising costs, streamline operations, and drive growth.

It’s important to remember AI is a tool. And like any other tool, for it to be of value, you need to learn how to use it effectively, and for its intended purpose.

AI is heavily reliant on the information it receives. You put the wrong or minimal information in, and you’re going to get the wrong or minimal information out. And that could be costly if you rely only on the output from AI prompts.

To enable small businesses to increase efficiency, AI requires quality data to learn patterns, make decisions and automate processes.

Here's five considerations for small business owners to explore when looking to harness the power of AI.

1. How AI improves efficiency

A significant benefit of AI for your small business is its ability to save time and improve efficiency. It can automate repetitive and time-consuming administration or data entry tasks. AI is also able to free up valuable human resources, allowing your team to focus on more strategic and creative work that drives new business. AI-powered chatbots can handle customer service enquiries while other AI tools can automate email marketing campaigns, or schedule social media posts.

To integrate AI successfully, you should start with a specific business problem you need to solve. If you’re a retail store you could use an AI tool to analyse sales data and predict demand for certain products, optimising inventory. As a service-based business you could use AI to automate appointment scheduling and client communication.

2. AI can protect data. Your most valuable asset

When people think of a data breach, they usually think of a large corporate company being hacked by cybercriminals that affect thousands of customers. That’s because these data breaches make for dramatic news reports.

The truth is, cybercriminals purposely focus on small and medium sized businesses as they’re considered an easier target. SMEs don’t have the same level of data security as large companies, which makes them more vulnerable to a cyber-attack.

Although you own a small business, you still have sensitive customer information, financial records, and proprietary business data. All this information is highly valuable to cybercriminals. When choosing to integrate AI into your business, it’s essential it has end-to-end encryption, secure data storage, and complies with data protection regulations. A data breach can result in significant financial penalties and irreparable damage to your business name and customer trust.

3. AI insights

Beyond efficiency, AI offers other benefits to your small business. It can provide valuable insights into customer behaviour by analysing purchasing patterns and website interactions. This valuable information allows you to personalise marketing and improve customer loyalty.

AI can also enhance the customer experience by providing instant, accurate support through virtual assistants. AI-driven analytics can help with financial forecasting and fraud detection, providing a level assurance that was once only available to large corporations.

4. AI is no match for human employees

A common misconception is that AI will replace human employees. AI is a powerful tool that can help employees achieve more in less time. It automates repetitive tasks that drain an employee's time, allowing them to work on tasks that require critical thinking, creativity, and emotional intelligence. A sales team can use AI to identify high quality leads, allowing them to spend more time developing relationships with potential new clients and maintaining relationships with existing clients.

5. Practical examples of AI for small businesses

The adoption of AI extends across a range of industry sectors. Hospitality venues use AI to reduce costs associated with food spoilage and waste as well as staff management. Retailers use AI to analyse customer buying habits, make suggestions for similar products, remind customers of abandoned online shopping carts, and monitoring inventory. Professional services businesses use AI to streamline processes and complete repetitive tasks so employees can focus on client service and business development.

AI is changing the way businesses of all sizes and industries operate. The advances in AI have made it more accessible and user friendly for small business owners, which will increase its adoption.

By carefully considering these five points, as a small business owner you can confidently embark on your AI journey. Transforming your operations and securing a prosperous future for your business in the digital age.

Please note this is general information. Peninsula is not an IT specialist – you should consult an AI expert before implementing any technology changes into your business.

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