A third of small business leaders have only a basic understanding of AI

On average, only 12% would refer to themselves as an ‘expert’ in the technology, when thinking about their proficiency in five core pillars of AI: Generative AI, chatbots and virtual assistants, speech to text and vice versa, text analysis and summary, and AI-powered text editing.

The biggest barriers to further AI adoption were found to be IT security issues (25%) and a lack of appropriate financing possibilities (25%). A slow internet connection (22%) was the third largest barrier.

There is also a knowledge barrier preventing many small businesses from reaping the full benefits of tech and AI in the workplace. Over a fifth (21%) of business leaders cite insufficient digital skills of employees as being problematic, while a similar percentage (19%) cite an internal resistance to change as a hindrance. These barriers and lack of understanding are leading to a delay in uptake of the technology.

Within smaller businesses there was a clear divide between those at the larger end of the spectrum and those at the more micro end when it comes to using AI. The survey found AI is used in 36% of micro businesses (0-9 employees) and 44% of small businesses (10-49 employees) but rises to 60% of medium-sized enterprises (50-249 employees).

How one Nottingham based small business is using AI to stay ahead…

Bright Beany Accounting specialises in providing automated, tech-driven financial solutions for businesses of all sizes. Located in Nottingham, co-founders Max Polkey and Katy Dales have over 25 years of experience in the sector and realised how time-consuming and inefficient traditional accounting methods can be. This spurred on the duo to use their expertise in automation and digital technologies to launch their own business, which was supported by Start Up Loan funding earlier this year.

Max Polkey, Co-Founder at Bright Beany Accounting, said: “Having worked in both accounting practices and in industry, we understand the inefficiencies and difficulties that are unfortunately a part of the sector. So, when launching Bright Beany Accounting, we were passionate about introducing automation and technology at an early stage to speed up processes and innovate as much as possible to stand out from the crowd and enable us to spend more time adding value to our clients.

The funding from Start Up Loans was a huge factor in helping us to refine these services and to create a team that is well equipped in digital skills as well as accounting.

I would urge similar sized business founders to also seek out the benefits of installing technological processes into their daily lives, and consider how automation and AI can be an opportunity to grow.”

Louise McCoy, Managing Director, Start Up Loans Products, British Business Bank said: “AI has the potential to transform the way smaller businesses operate, but people running those businesses face a plethora of barriers which need to be overcome if they are to benefit from the technology. We hope our information, as well as start up financing, one of the biggest hurdles identified, can help drive more use of AI.

By adopting AI responsibly, smaller businesses could unlock new opportunities for growth and innovation, ensuring they remain the driving force of the UK economy”.

Start Up Loans offers pre- and post-loan support packages, including access to Learn with Start Up Loans, a partnership with the Open University, with courses covering key aspects of running a business.

The Start Up Loans programme was established in 2012 to help people - wherever they are in the UK and whatever their background - to achieve their ambitions of starting their own business. It provides fixed-interest loans of between £500 and £25,000 to aspiring business owners, many of whom might otherwise struggle to secure finance.

For free advice on how to use AI to grow a business, please visit: Free AI tools to help grow your business.