Trace Id is missing

AI for Small Business: A Beginner’s Guide

A person wearing headphones sits at a desk working on a laptop

With the recent advancements in AI, there’s no denying that it’s an increasingly powerful and versatile tool that’s here to stay. Companies of all sizes have used AI in business to a degree for some time now, but as its capabilities, popularity, and access grow, many are wondering how to implement AI for their small business.

Machine learning and AI for small business

What is AI?

Something has AI when it can process information without an organic brain. It’s not alive, but it can sort information because of machine learning. 

What is machine learning? 

Machine learning is the process of teaching a machine how to react to a data type. It’s a simple process, but it becomes complex when you add more information. Read on for an example of what machine learning looks like in a real-life small business scenario.

How can I use AI for my small business? 

Imagine that you own a flower shop, which also has a website. If a customer searches your site for “red flowers,” you teach your website how to respond. For example, training it to show the customer red roses, tulips, and Gerbera daisies.  

Additionally teaching your website to also show customers red flowers that are only available seasonally during the time of their search takes the machine learning a step further and could be an effective marketing tactic. Or teaching your website to show customers popular red flower options for upcoming holidays.  

The machine doesn’t know anything until you program it with the appropriate information. It’s not thinking, exactly; it’s responding to “if so” and “if not” statements. 

How AI thinks

AI programming “thinks” like this: 

If a customer wants red flowers, show them red roses, tulips, and Gerbera daisies. Is a holiday coming up? If so, show them the red holiday options. If not, don’t show them additional red flowers. 

A more complex AI processes an enormous number of “if so” and “if not” calculations. If you ask a GPS device to give you the fastest route to a location, it will rapidly look at many data sources. For example, you may want to know if you’ll encounter traffic, problematic road conditions, or weather-related delays if you take Main Street. 

The GPS will ask other AI sources, like state transportation databases and weather information sources, what they know. Those sites will also respond based on “if so” and “if not” information that they gather. 

Those AI sources have cameras that show the speed of traffic on Main Street, which they share with your GPS. Your GPS then compares the rate of traffic on Main Street to other streets. 

No matter how complicated the results seem, they’re still a product of “if so,” do this, “if not,” do that. 

Are machines thinking? 

Machines can process some sources of information faster than people can, but machines are dependent on humans to teach them how to process data. 

Grow your business with Microsoft 365

Bring your business ideas to life with the tools you need to create, connect, and get more done from anywhere.

Learn more

They don’t think for themselves, even if it seems like they do. 

What are the best AI tools for small business? 

Three people in a meeting room, smiling and discussing, with digital graphics of technology icons and a network globe overlaying the image.

Achieve your business’ full potential with the power of AI

Boost your business’ productivity and creativity. Microsoft 365 Copilot enhances the apps you use every day and help your team do more with less.

There are many useful AI tools for small businesses—AI can power cybersecurity, aid in customer relationship marketing (CRM), streamline customer service, and help with personal productivity at work. 

Cybersecurity software 

Each day, security companies discover new threats to business and consumer data. 


Even if you have a low-tech business, your business partners may accidentally expose you to digital threats. Banks, credit-reporting agencies, and major retailers have all unintentionally compromised their customers’ data. 


Cybersecurity powered by AI may be able to provide more protection than other types of programs. Instead of dealing with threats after losses, AI security programs look for unusual activity to stop attacks or raise alerts earlier. 


AI can also look for irregularities in other systems, like inventory and accounting, to find signs of illegal activity. 


The unusual activity could even identify opportunities. 


For example, a plumbing-supply company’s AI notices an unusual order. Why did a decorator order $1,000 of metal pipes and flanges? A follow-up call to the decorator sheds light on the mystery. Apparently, the decorator makes trendy industrial shelving units and light fixtures with the pipes.  


The plumbing-supply company now sees an opportunity and starts marketing to a whole new group of customers. After learning about the new customer, the company can highlight how trendy and modern it is on social media. Moreover, the company can share light-fixture plans or instructional videos with followers. 

CRM software 

CRM software is another example of a helpful AI tool that small businesses can use to learn about customers. With each order, it understands more about what they need and how they interact with your business. 

The plumbing-supply company with CRM software learns that Harry’s Happy Plumbers (HHP) orders pipes and pipe glue every three months. Using that knowledge, the supply company’s AI offers HHP a coupon for its next pipe and glue order two and a half months after the last purchase. 

This offer shows HHP that the supply company appreciates and anticipates HHP’s needs. 

CRM software could also automatically send HHP information on new appropriate products based on prior purchases. 

Interactive customer service 

 As you’ve probably noticed, many companies implement AI in business to streamline customer service. AI can help customers by: 
  • Offering help after normal work hours.
  • Using AI voices to respond to customers’ verbal questions over the phone. Websites for small businesses can use chatbots to talk with consumers. 
  • Looking up information when they use voice search on their mobile devices. Voice answers are ideal for consumers on the move. 
  • Answering a question before they ask. If a customer looks at troubleshooting pages on a website, the AI can direct them to more help. 
  • Answering common questions, which is efficient for both the business and the customer. 
  • Deciding if they need human help and redirecting them. 
  • Being accurate—AI doesn’t transpose numbers or guess. Program it with accurate information, and it will share the same information. 


 Incorporating AI for your small business is a great way to strengthen productivity and professional development at work. With the right AI program, you’ll be able to:
  • Improve workplace communication and save time by asking AI to draft emails.
  • Quickly create summaries of various content to get others or yourself up to speed—including summaries for lengthy email threads.
  • Ask for edits to work you’ve written to make it more concise, adjust tone, and correct inconsistencies.
  • Easily analyze and explore data from spreadsheets.
  • Turn written documents into presentations for meetings.
  • Create meeting agendas based on chat history.
  • Grow professionally as you learn from the suggestions that the AI makes to your work.

How does AI in business add value? 


Using AI in business adds value by:


  • Analyzing data to understand your customers. 
  • Constantly learning more about your customers over time. 
  • Alerting you to threats and irregularities. 
  • Automating repetitive, time-consuming tasks, so people can focus on other more creative priorities.


  • Helping people improve their written communication.


How to get started with AI


The options for AI may seem overwhelming, but the value it can add to your small business and professional development is well worth the groundwork. Take the next step to learn more about getting started with AI at: 



The Microsoft 365 team is focused on sharing resources to help you start, run, and grow your business.

Get started with Microsoft 365

It’s the Office you know, plus the tools to help you work better together, so you can get more done—anytime, anywhere.

Related content

Business Tech

Six Generative AI Benefits for Small Businesses

Business Productivity

How to Use AI to be More Productive and Efficient at Work

Business Tech

AI and productivity: How to use AI tools to improve the employee experience

Business Productivity

A guide to Agile DevOps for SMBs

Business Insights and Ideas does not constitute professional tax or financial advice. You should contact your own tax or financial professional to discuss your situation..

Follow Microsoft 365