A quartet of witnesses testifying this week to the House Small Business Committee disputed the commonly-held belief that artificial intelligence will displace human workers and insisted that small businesses which use AI are likely to wind up having to hire more employees–because they’ll grow.
Already, a majority of small businesses are using AI for a wide range of purposes, said Jordan Crenshaw, senior vice president at the U.S. Chamber of Commerce’s Technology Engagement Center. Last year, 58% of small firms nationwide reported using generative artificial intelligence, an increase from 40% in 2024 and 23% in 2023, he told lawmakers. But the real kicker, he added, is that 82% of small businesses that reported using AI had increased their staff headcounts over the past year. “These businesses are not using AI to replace people,” Crenshaw said. “They’re using it to help employees focus on high value work that requires judgment, creativity and relationships.”
So what’s the best way for a small business to deploy AI?
- Focus on what you’re not doing now, that could increase sales. “So many small businesses don’t have a website,” observed Chike Aguh, the head of innovation and strategy at the Kapor Center, which promotes inclusion in tech. “So many small businesses are not advertising in any way, shape or form because they can’t hire a designer. AI can make those things happen.” It’s not just about a web site, but about a mind set. “Small businesses need to think about, ‘What is not happening in my business that AI can help make happen,’ versus, ‘What is the thing that’s happening now that potentially could be done by someone else?’” Aguh told lawmakers.
- Start with something that needs to be fixed. “I always advise businesses to start with the problem that is most at hand. What is the thing that bothers them day to day? That’s where to get started,” said France Hoang, the founder and CEO of AI firm BoodleBox, which creates online spaces where teams in education, law or business can use AI tools securely and collaboratively. He cited a small coffee company owner in Detroit, Tekeyah Gaines, who he said has used AI to more accurately price her products, and also to bolster her marketing footprint. The result, Hoang said, is that Gaines’ average orders have risen from $38 to $47.
- Invest in training workers on Al and listen to their ideas. Instead of replacing workers with AI, Aguh said, businesses should instead be investing in training their workers on how best to use new AI tools, and should even be consulting their staff on how and where to put AI to use.
- Think of AI as a force multiplier. “AI is a force multiplier that helps small businesses do more with limited time, staff and resources,’’ said Crenshaw. For example, he said, “A retailer can use AI to understand demand and personalize marketing. A restaurant can improve scheduling and inventory. A professional services firm can automate routine drafting and research. A manufacturer can reduce waste and improve operations.”
- Make your back office more efficient. Aguh said small businesses are already finding AI useful for back office tasks such as accounting, tax payments, bookkeeping, and marketing and sales lead generation.
- Use AI to simplify onboarding and training for new staff. Anthony Qaiyum, the owner of Chicago-based Merz Apothecary, told committee members he recently used AI voice transcription and writing tools to create a multi-month onboarding program for a new hire. “She later told me it was the clearest roadmap she’d ever received when starting a new job,” he said.
- Make sure you pick the right AI tool for the job. There are a wide array of AI models now available for low to no cost online, with different strengths and weaknesses. It’s important for users to learn which models are the best for the job they want AI to tackle. “It is tempting to believe that everything is a nail and that is amenable to the AI hammer,” said Aguh. “Helping these small business leaders pick the exact hammer for the exact right nail is so important. It might be Claude, it might be ChatGPT.”
- Find a secure AI system that you can trust. The more candid a business owner can be with an AI system about internal finances and sensitive data, the more useful AI models can be to companies. So it’s important to find an AI system the business owner feels is secure. “AI is only as good as the information you put into it, the context. A lot of businesses are fearful of putting their proprietary data in. That’s unfortunate because that’s how you get the best results from AI,” Hoang said. “Find a platform where you feel the privacy and security allow you to use your data.”
- Look for AI accelerators, coaches and government-funded training. The experts agreed that more AI literacy programs will be needed to properly educate entrepreneurs on how best to utilize new models, and emphasized there are already some such resources available, such as the U.S. Chamber of Commerce’s Small Business Basics program. “For those of us who are athletes at any point in our lives, you didn’t read a book on how to do a jump shot or throw a football. You did it in the field, with a coach,” Aguh said. “AI is ironically showing the need for more work in the field, in the place of work…classes are good. Real life experience is better.”
- Consider paying for AI if necessary. There’s been so much progress and competition in AI in the last few years that there’s an abundance of tools available online free of charge, but some of the more advanced and valuable tools still come at a price. Those may be worth paying for, depending on the job. “Basic AI is cheap and it is everywhere,” Hoang said. “The premium AI that delivers real results still costs money, and a new divide is opening up between Wall Street and Main Street.”
Qaiyum also told lawmakers that since his company has begun utilizing AI more heavily, he’s increased his staff by 20%, from 50 to 60 employees. “We look at (AI) as a set of tools to help us increase our capacity and then bring more people on,” Qaiyum said. “Right now, we’re building an AI agent to handle routine accounts payable work that takes one employee more than 20 hours per week, hours we’d rather have her helping with strategic problems to grow our business.”
Qaiyum said Merz Apothecary – which sells health, beauty and grooming products – also relies on AI tools to get analysis of cash flows, track inventory, keep tabs on investments, record expenses, manage payroll, and look out for possible financial risks.
“And we’re still hiring,” Qaiyum said. “We’re at the point now where we’d like to bring someone in who has more experience (with AI) because we see so much opportunity ahead.” Qaiyum repeatedly insisted that AI is a new technological advantage, while “humans are the durable advantage that you have.”
Crenshaw also warned that small businesses will suffer if Congress fails to act on regulating AI, and leaves the issue to the states, which would create a costly national “patchwork” of business rules that smaller firms would be hard-pressed to navigate.
He cited a study from the Information Technology and Innovation Foundation (a nonprofit think tank that gets much of its support from the tech sector and other big companies). It concluded that without a national set of AI data privacy rules, it will cost the nation roughly $1 trillion over the next decade, with $200 billion of that being borne by the small business community. He also singled out a relatively new California state law, the California Consumer Privacy Act, which underwent rulemaking involving AI after it was signed into law in 2020; Crenshaw said it’s now estimated that it will cost small businesses $16,000 annually to comply with the AI portion of the law.
The bottom line, experts told lawmakers, is that AI will not be able to replace truly human capabilities, but rather should empower workers with new tools to become more efficient, productive and skilled. The four urged Congress to approve more funding for AI literacy training for businesses and workers, and to set up a national regulatory framework for AI models to follow, instead of the current state-by-state regulatory patchwork that is developing in the absence of federal AI rules.
Although the committee took no action on any specific bills or proposals on Tuesday, several House members said they believe it’s important for Congress to approve some type of national regulatory framework for AI and tech companies, along with funding AI literacy programs through the Small Business Administration.
“Our goal is to make every small business and entrepreneur make sure they have the opportunity to succeed in the emerging age of AI,” Committee Chairman Roger Williams, a Texas Republican, said at the outset of Tuesday’s hearing.
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