For Small Businesses, Optimism About AI Outweighs Concern
Most feel AI will save them time, money in the long run
Small businesses generally feel that AI can save them time or money in the long term and view AI as a skill that will reshape the workforce. At the same time, many are aware of the costs associated with training employees about AI, both in terms of hours and money spent.
Small businesses see a future in which AI changes the American workforce. Two-thirds of small businesses say they expect AI to change the roles they have on staff in the future (65%) or expect AI proficiency to be listed in future job postings (64%). Additionally, most small businesses say they are likely to use AI for a range of familiar administrative tasks now handled by humans, including developing standard operating procedures (70%), developing an organizational chart (70%), or helping write a business plan (68%).
By sector, retail and professional services are most likely to see AI changing roles. Small businesses in the retail (72%), professional services (71%), and manufacturing (66%) industries are more likely than those in services (54%) to say they expect AI to change the types of roles they have on staff.
Most small businesses say having employees with AI skills could give them an edge and save both time and money. Three-quarters of small businesses (74%) agree that having employees who use AI tools could give them an edge against competitors. In addition, roughly seven in ten say that hiring employees with AI skills could save them time (71%) or money (67%) in the long run.
Some small businesses are concerned about the time and money it will take to train employees on AI. About half of small businesses agree they worry about the time (52%) or money (49%) it would take to bring employees up to speed on AI. Small businesses with 20-500 employees are particularly concerned about the time it will take to bring employees up to speed (65%) compared to small businesses with 5-19 employees (47%) or 1-4 employees (51%).
A majority (63%) of small businesses also say that their business needs to do more to train employees to use AI at work. Agreement is higher among those owned by Gen Zers and millennials (71%) than those owned by Gen Xers (60%) or those owned by baby boomers and older generations (52%).
The majority of small business owners report being generally familiar with AI—and all of them report at least having heard of it. The majority of small business owners (87%) are familiar with AI, including 38% who say they are very familiar with it—while zero percent say they have never heard of AI.
Percentage of small businesses that agree they worry about the time it would take to bring their employees up to speed on how to implement AI (by employee count)
Tulsa, Oklahoma
Younger generations more familiar, likely to experiment with AI
By age, there are significant differences in familiarity with AI. Gen Z- and millennial-owned small businesses (52%) are much more likely to report they are very familiar with AI compared to Gen X-owned (36%) and baby boomer and older-owned (19%) small businesses.
Small businesses in the professional services (47%) and retail (40%) industries are also more likely to say they are very familiar with AI compared to those in services (29%).
Small businesses owned by younger generations are also more likely to report experimenting with AI tools or report a likelihood to do so in the next year. Small businesses owned by baby boomers and older (27%) are less likely to say they have tried out different AI tools compared to those owned by Gen Zers and millennials (45%) or those owned by Gen Xers (42%). In the next year, small businesses owned by baby boomers and older generations are also more likely to say they are not planning to do anything to prepare for AI in the workplace (45%) compared to those owned by Gen Zers and millennials (15%) or those owned by Gen Xers (25%).
40% have tried AI tools and nearly half plan to by next year
While generally optimistic about AI and how it can help their business save time and money, like many others, small businesses are still in the early stages of figuring out exactly how AI applications can benefit them.
When asked what their business has done to prepare for AI in the workplace, 40% of small businesses say they have tried out different AI tools to suit their needs. Fewer say they have conducted employee trainings on how to use AI (23%), requested experience with AI in job postings (16%), established or updated a company AI conduct policy (15%), or created or maintained a team or taskforce dedicated to AI (13%).
Nearly half (49%) of small businesses say they plan to try out different AI tools to see which ones best fit their business needs in the next year. Similarly, more small businesses say they plan to establish or update a company AI policy in the next year than say they are already doing so (24% vs. 15%, respectively).
These differences suggest small businesses are still in the adoption phase of exploring and implementing AI tools in the workplace.
Small businesses are most likely to seek information about AI in the workplace from some fairly familiar sources such as: Google (82%), other business owners (72%), and AI experts (71%).
Furthermore, more than half say they are likely to seek information from social media (62%), mentors (62%), the Small Business Administration (61%), or family or friends (59%). Fewer say the same about local colleges (48%).
Percent of small businesses who have done the following:
Mentor, Ohio
Inflation remains the top challenge for small business
Inflation has topped the list of challenges over the past two years and remains at the top of the list across business size, sector, and region. However, businesses in the services (65%) and manufacturing (58%) industries are more likely to cite inflation costs as a key challenge compared to those in professional services (44%).
A distant-second concern, revenue (26%) remains the second biggest challenge for small businesses, followed by rising interest rates (18%) and affording employee benefits or healthcare (18%). This is the third consecutive quarter where revenue ranked as the second biggest challenge.
Years in business and the generation of ownership also impact perceptions. Small businesses that have been operating for 11-20 years (67%) or more than 20 years (62%) are more likely to cite inflation costs as a top concern than those that have been operating for 10 years or less (50%). Similarly, small businesses owned by Gen Z or millennials are less likely to cite inflation as a top concern (49%) compared to those owned by baby boomers or older generations (65%). These trends are similar to previous quarters.
Top 5 biggest challenges facing small business owners
Midvale, Utah
Biggest challenge right now (% selecting, top 5 shown)
