Small Businesses See AI as Driver of Confidence: American Express Study

Small businesses see artificial intelligence (AI) as a driver of confidence, and many are seeing positive returns on their investments in AI through reduced errors (45%), operational efficiencies (42%), employee productivity (42%), and increased sales (41%), according to American Express’ latest Amex Trendex: Small Business Edition. Respondents remain divided on AI, however, with just over half (56%) saying that their business currently uses AI.

“Five years since the COVID-19 pandemic forced small businesses to pivot, they are embracing a change mindset and customer-first innovation to drive growth,” says Ro Gutierrez, SVP and head of small business products at American Express. “As these small businesses look to the future, they anticipate that the next five years will be defined by building a strong financial footing and modernizing their technology.”

Key takeaways:

·        Over nine in 10 (92%) small businesses expect their customer base to change this year, with 75% believing that the change will be more prominent in 2025 than in previous years.

• Among those who use AI, 86% say AI helps them make more confident decisions for their business.
• And yet, almost nine in 10 (87%) small businesses currently using AI admit they are still learning how to use it effectively, and two-thirds (68%) say they thought AI would have made a bigger impact on their business than it actually has.
• Nearly half (46%) who currently use AI implemented it within the past 12 months, and over half (52%) of all businesses using AI believe their business started using AI prematurely.
• Still, many wish their companies were investing in AI, with 33% of businesses who do not use AI saying they wish leaders in their company were more interested in using it.
• Small businesses who don’t use AI still express reservations, specifically concerns that their data is not secure when using AI (68%), how expensive AI tools are (60%), and that the time investment required to train employees is too time consuming (56%).
• Knowing what they do now, 87% say there are things they would have done differently to prepare their businesses, such as building cash reserves (46%), developing contingency plans for unexpected events (31%), and prioritizing their social media following (31%).
• In addition to adjusting their business strategies, 83% of small businesses said they will prioritize introducing new products or services and 79% will prioritize winning market share from the competition in 2025.
• Asked what themes will define the next five years for all small businesses, respondents cited rising labor costs (42%), building cash reserves to manage unexpected events (41%), navigating the economic environment (40%), and preparing their business their business for the AI era (38%).
• 91% of small business owners maintain customer engagement as the most important part of running a business.
• In the face of a changing customer outlook, 78% of small businesses say that they are making changes to their businesses to attract a new type of customer.
• Over nine in 10 (92%) small businesses are prioritizing expanding their local customer base, while only 78% are prioritizing expanding their national customer base and 60% are prioritizing international customers.