Resource Center / Small Business

What Small Businesses Need to Know about Generative AI

Written by Live Oak Bank

Artificial Intelligence (AI) has been around for some time but with limited scope and access. You may wonder why you’re hearing so much about AI recently if it’s existed for so long. Recent technological advancements, paired with new generative AI products like OpenAI’s ChatGPT, have enabled everyday individuals and small businesses to access and use this advanced technology. In this article, we will discuss what increased access to generative AI for small business means for you, but first, let’s start with defining artificial intelligence and then dig deeper into the capabilities of generative AI. 

What is AI?

Artificial intelligence refers to technology that aims to mimic human-level intelligence and understand, learn, and perform intellectual tasks that humans can do. A defining feature of AI is the ability to change rules or logic over time without human intervention versus other technology tools that improve efficiency but require human intervention and pre-defined rules.

There are several subsets of artificial intelligence. One of those that has recently garnered a lot of attention is generative AI. Generative AI is artificial intelligence that can generate new content and artifacts, such as original text, images, audio, and video, based on the massive amounts of data these models are trained on. Examples of generative AI programs include Open AI’s ChatGPT and DALL-E, Microsoft’s Copilot, Google’s Bard and Anthropic’s Claude.

What are the opportunities to leverage Generative AI for small business?
Customer Experience

There are several ways that AI can help improve customer experience. One example is using chatbots to mimic human-like conversations to deliver quick and seamless customer service or perform routine tasks such as sending order confirmations and following up on support tickets. For example, if you are getting complaints about customer wait times, you could use an AI chatbot to handle basic customer inquiries while transferring customers to a live representative for more complex questions or situations. AI can assist with these transfers by providing the customer service representative with a comprehensive view of the customer before the rep gets on the phone, thereby helping improve the customer experience.

Research and Brainstorming

Generative AI for small businesses can be helpful when analyzing vast amounts of data to provide insights and trends, or extracting critical information from lengthy documents, articles, and reports. Let’s say you have a long report to read and glean information from. AI tools can help summarize and pull key insights from the report to share in an upcoming meeting, resulting in big time-savings.
AI can also help generate or accelerate ideas, like product ideas or new business concepts based on your existing offerings, customer demographics, and market trends. You can use image-generating AI to begin bringing these concepts to life.

Analysis and Data-Driven Decision-Making

When analyzing trends in your business and industry, AI tools may provide valuable market insights and customer behavior patterns. Let’s say you are considering expanding your business to a neighboring town. Market research can help you assess the need first. AI can also assist with forming projections based on past data, perform sentiment analysis on customer reviews, and identify emerging opportunities to outmaneuver competitors. When you are looking to organize the data, AI can provide Excel support. When you’re ready to present your data, it can offer PowerPoint support.

Writing and Editing

Potential uses of AI in writing and editing include generating content like business plans or fresh marketing such as blog posts, articles, and product descriptions. AI programs can also refine and rephrase existing content with grammar checks. For example, if you have written an original blog post for your business and want to improve the grammatical structure and correctness and make it more detailed or descriptive, AI can help. Language translation is another valuable AI tool to help you reach broader audiences.

Design and Production

AI can optimize marketing strategies with customized and personalized campaigns, generate graphic designs and visuals for marketing materials and social media posts, create video content to promote products and services, and prototype products and websites.

The caveat: what should small businesses watch out for?

As discussed above, artificial intelligence can be a valuable tool in your toolbox for business needs. However, businesses using or contemplating the use of AI should be mindful of its risks and limitations. This technology is still in its early stages of use and development. Before using generative AI for small business, here are a few things to consider.

The quality of the response depends on the quality of the input. It’s important to remember that even though responses sound like a live human, they are computers whose answers are based on sources they’ve been trained on (books, websites, scientific papers, news articles, social media, forums, etc.). These sources can include misinformation and bias. Currently, the reference data used by AI is not real-time, and in many cases, the input sources used to compile responses are several years old. Always review and edit results before publishing AI-generated content.

Also, legal ownership of the content is ambiguous, so don’t use it to create anything that could be misinterpreted as your intellectual property. Remember that nothing created by generative AI can be copyrighted.

Just like a Google search, AI stores your interactions. Do not share sensitive personal or customer data in your interactions. AI systems can be vulnerable to security breaches, resulting in private data being compromised or stolen. Cybercriminals, scammers, and hackers use AI to launch more sophisticated attacks and make phishing emails and websites more convincing, which can be challenging to detect and defend against. Use caution and be wary of clicking links in unknown emails.

For these reasons, it is best to use generative AI for small businesses as one of many tools in your toolkit and not rely on the outputs alone.

Wrapping up

Artificial intelligence has rapidly evolved and is now ubiquitous in daily life for many people. Though it's crucial to be cautious and discerning when utilizing these capabilities, AI has enormous potential to help organizations enhance the quality of their products, efficiency, and cost savings.

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