Six Generative AI Benefits for Small Businesses

In the last few years, there’s been plenty of buzz about generative AI and its capabilities. Put simply, generative AI tools use AI to create or modify content, such as text, images, audio, and video. These tools can generate content from scratch, based on a prompt, as well as change existing content. For example, adding captions, filters, or effects to an image.

More and more, small businesses are looking to generative AI tools to improve and automate different parts of their operations. Areas like marketing, customer service, product development, collaboration, and content creation are just a few of the functions that generative AI can elevate. And the benefits are substantial. Read on to better understand how using generative AI tools can transform your own small business.

How do generative AI tools work?

Generative AI tools work by using algorithms to analyze data and create different kinds of content.

A common foundation for generative AI tools is based on neural networks, which are computer systems that mimic the structure and function of a human brain. Neural networks can learn from data and produce outputs that aren’t predefined by rules, but rather based on patterns and probabilities. For example, a neural network can learn how to write catchy headlines by analyzing thousands of existing headlines and generating new ones that follow similar styles and structures.

Top benefits of generative AI tools for small businesses

Explore six ways that generative AI tools help small businesses.

1. Increased productivity

Automate and streamline daily tasks in record time with generative AI productivity tools. You’ll not only get work done faster but also free up time to focus on other, potentially more important, work. For example, you might use generative AI to:

Write personalized, professional emails to clients, customers, partners, and coworkers based on each audience’s preferences, needs, and goals. Over time, this can save hours of work. And, if written communication isn’t one of your strongest skills, it may increase engagement and conversions and help you feel more confident.
Schedule meetings with coworkers, customers, or suppliers based on their availability, location, and agenda. Asking a generative AI tool to do the scheduling for you reduces time spent juggling multiple people’s calendars, time zones, and platforms.
Draft reports or summaries of specific data, such as sales data, expenses, or customer feedback. This greatly speeds up the time it would typically take you or an employee to manually collect, organize, and analyze data. And the AI can even provide recommendations based on such reports.

2. Enhanced creativity

Generative AI tools for creativity help small businesses come up with new and original content. This is particularly beneficial for businesses with just a few employees who take on many roles. For example, you might use generative AI to:

Create slogans for products, services, or campaigns based on factors like keywords, a target audience, and tone.
Design a logo for your brand based on your company name, industry, and style. For even more personalization, ask the AI to design a logo that factors in your brand identity and values, so the design appeals to your target market.
Write marketing content for blog posts, social media posts, and newsletters based on different topics, genres, and audiences. Using generative AI for these tasks simplifies content management and creation and can help you build an engaged reader base. Just remember to fact check the work.

When it comes to enhancing creativity with AI, the experience is often less about the AI providing the perfect output and more about the initiation of the creative process. By reviewing some AI suggestions that might not be the strongest, you’ll naturally start to think about what does work better.

3. Faster decision-making

Analyze data and extract insights to make informed decisions faster, optimize organizational performance, and identify new growth opportunities. For example, you might use generative AI to:

Analyze customer feedback from reviews, ratings, and surveys, and then generate a sentiment analysis, summary, or list of next steps to take based on the feedback. This will help you better understand how customers feel about your products, services, or brand and may shed light on how to improve customer experience and satisfaction.
Analyze market trends on demand, supply, or price, and generate a forecast, comparison, or recommendation. You’ll get a glimpse of how the market is changing and how to adapt to new conditions and expectations.
Analyze competitor strategies based on their products, services, or marketing, and generate a strengths, weaknesses, opportunities, and threats (SWOT) analysis. By seeing how your competitors are performing and positioning themselves, you’ll be able to differentiate your business and go for a competitive edge.

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4. Cost savings

For many small businesses, finding ways to cut costs isn’t just ideal but necessary for survival in a competitive marketplace. Fortunately, AI can also save businesses money. For example, you might use generative AI to:

Optimize inventory management to minimize costs associated with overstocking and stockouts. Analyze historical sales data, market trends, and other relevant factors to forecast demand accurately. You’ll reduce excess inventory costs, lower storage expenses, and improve cash flow management.
Automate repetitive, time-consuming tasks that you and your employees regularly perform. Like the old saying goes, “Time is money.” With more time on your hands, you’ll be able to focus on higher-value tasks. And because repetitious tasks are also often mundane, you may even improve employee morale and retention while you’re at it—a win-win.
Improve energy efficiency at your office or storefront by analyzing energy consumption patterns and environmental data. The AI might suggest cost-saving actions like adjusting heating and cooling schedules, optimizing equipment usage, and upgrading equipment.

5. Scalability

Scale your small business’s output and reach without taking on financial risk. For example, you might use generative AI to:

Create more content related to your brand, such as blog posts, social media posts, and newsletters. With the increase in content, you’ll be better positioned as a trustworthy organization that can reach more potential customers and leads. But be sure to always review AI-generated content for accuracy.
Serve more customers with chatbots capable of answering common questions, resolving straightforward issues, and offering recommendations.
Expand to new markets by creating content and providing customer service in different languages, styles, or perspectives. This will help boost market penetration and diversify your offerings, so you reach more customers.

6. Improved customer service

Provide streamlined customer service with chatbots and AI-based recommendations. For example, you might use generative AI to:

Immediately answer frequently asked questions about features, benefits, and the prices of products and services. This will provide instant, accurate answers to the most common questions.
Resolve customers’ issues faster related to delivery, payment, or quality. Having effective processes and solutions in place to address customers’ complaints will strengthen their satisfaction and loyalty.
Offer personalized recommendations, such as which products, services, or offers are best suited for different customers based on search and purchase history.

Take the next step with generative AI tools

Generative AI in the workplace has become more accessible and affordable for small businesses, thanks to technological advancements and popularity. If you’re just starting to explore AI and which generative AI tools may be the right fit for you, check out these related:

Copilot for Microsoft 365—Learn why 77% of Copilot for Microsoft 365 users said that once they started using this AI assistant at work, they didn’t want to give it up.
Microsoft AI Business School—Discover training designed to help you transform your small business with AI.
Responsible AI practices—Understand why a set of ethical principles is a necessary backbone for any responsible generative AI tool.
AI and productivity—Improve your employees’ experiences with AI productivity tools.

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