AI is all over the headlines—but not in most business operations. While the media focuses on billion-dollar valuations and futuristic chatbots, most small business owners are still trying to figure out where this technology actually fits. According to a new NFIB survey, only one in four small businesses currently use any AI tools. At the same time, nearly two-thirds believe AI will play a significant role in their industry within the next five years.
This isn’t about being behind. It’s about being deliberate. For most Main Street owners, the goal isn’t to be “cutting-edge”—it’s to build a business that’s stable, cash-positive, and strategically aligned. Jumping into unproven tech without a plan is the opposite of that. So the question isn’t, “Why aren’t more small businesses using AI?” It’s “How can AI serve the game you’re trying to rig?”
Small Businesses Lag in AI Adoption
Small businesses account for the majority of U.S. companies and are often lauded for their entrepreneurial innovation. Yet recent research indicates they lag behind larger firms in adopting cutting-edge technologies like AI. The National Federation of Independent Business (NFIB) Small Business and Technology Survey found that only 24% of small employers are using any AI tools in their operations. By contrast, an estimated 78% of large companies were already deploying AI as of 2024. underscoring a significant gap in tech uptake. “Small business owners are our nation’s top source of innovation, yet many small businesses struggle to keep up with technological advancements,” noted Holly Wade, Executive Director of the NFIB Research Center. Limited resources, rapid tech changes, and uncertainty often make new technology adoption difficult for smaller enterprises. And when you’re wearing every hat in the business, clarity gets crowded out fast.
Even within the small business sector, adoption varies by size. Just 21% of businesses with fewer than 10 employees reported using AI, compared to 48% of firms with 50 or more employees. This illustrates that larger small businesses are more able (or willing) to invest in AI than “mom-and-pop” operations. The NFIB report itself acknowledged the paradox: the most innovative segment of the economy can sometimes be the farthest behind on technology. For many small companies, simply keeping up with competitors’ basic tech tools is a win, and any AI adoption tends to lag until its benefits are clearer.
High Hopes for AI’s Future Role
For the entrepreneurs playing the long game, this is a key inflection point. The ones gaining ground aren’t just chasing the tech—they’re using AI to build leverage, improve margins, and reclaim time. That’s how you create asymmetric upside: make the machine do what doesn’t need your brain.
In the NFIB survey, 63% of respondents said they expect AI to become important to some degree in their industry within the next five years. About one-third even believe AI will be moderately to extremely important in their sector in that timeframe. This cautious optimism suggests that while most entrepreneurs haven’t integrated AI yet, they are keeping an eye on its evolution and potential business benefits. “This includes the rapid proliferation of AI and how technology impacts business operations now, and their anticipation of how it will impact them in the future,” said NFIB’s Holly Wade, referring to the forward-looking mindset among survey participants.
Among the minority of small firms already using AI, they tend to apply these tools in specific areas to boost productivity. Nearly 30% of AI-adopting small businesses use it for drafting communications (emails, memos, documents), and 27% leverage AI for marketing or advertising content. About 14% use AI for business analytics or forecasting, and under 10% have deployed AI chatbots for customer service. Only very small fractions are experimenting with AI in accounting, process automation, or cybersecurity roles at this stage. Notably, introducing AI has not led to staff cuts at these companies – 98% reported no change in their employee headcount after adopting AI tools. Early adopters describe AI as augmenting their work rather than replacing humans. In fact, some report that automating routine tasks has increased their team’s output and even shortened workweeks by reducing drudgery. These tangible benefits, combined with growing accessibility of AI, are likely contributing to the sense that AI could soon be a standard tool for running a small business efficiently.
What’s Holding Main Street Back?
So why hasn’t adoption taken off?
First, perception. A recent NEXT Insurance survey found that 58% of small business owners said they have no plans to adopt AI. Many cited lack of knowledge, unclear ROI, or the belief that AI tools are too complex or expensive.
This is the cost of uncertainty. If you don’t know what problem AI is solving—or what it costs to get wrong—you’re unlikely to take the risk. And most business owners are already playing a high-stakes game with thin margins and limited time.
Second, capability. There’s a real digital skills gap. Younger entrepreneurs are adopting AI tools 2–3 times faster than their Gen X and Boomer counterparts, according to Inc. and LinkedIn analysis. That generational divide reflects more than just age—it shows how comfort with experimentation shapes how quickly someone will act on a tool’s potential.
And finally: complexity. Implementation fatigue is real. Some businesses that tested AI tools in 2024 have since pulled back. According to NEXT, AI adoption among small businesses actually fell from 42% to 28% over the past year. Tools that were pitched as “plug-and-play” turned out to require more integration, training, or oversight than expected. When a tool adds complexity instead of removing it, that’s a failure—no matter how flashy the tech is.
Even for those who are using AI in a limited way, accuracy and trust remain concerns. As Danilo Coviello, the owner of a translation agency, told Fast Company, “AI can’t sense tone shifts, legal nuance or when a vague phrase could cost a client down the line… That’s where people still matter.”
Bottom line: AI won’t replace your judgment—it just gives you more leverage when you use it well.
How Small Businesses Can Embrace AI
If you’re a small business owner looking at AI, the goal isn’t to catch up—it’s to calibrate. Certainty isn’t built by chasing trends. It’s built by solving real problems with repeatable systems. Here’s how to apply that mindset to AI:
- Start with bottlenecks. Look for slow, error-prone tasks that repeat often—manual email drafting, appointment scheduling, basic analytics. These are prime candidates for AI-assisted workflows.
- Pilot with purpose. Run a 30-day experiment with one tool on one task. Measure whether it actually saves time or reduces mistakes. If it doesn’t, move on. If it does, expand.
- Train your team. Most AI tools don’t require coding—but they do require judgment. Help your staff understand where AI fits (and where it doesn’t). That’s how you build internal leverage.
- Add guardrails. Document when AI should be used, how results are reviewed, and where human oversight is non-negotiable. This minimizes risk while keeping the benefits.
- Watch the cash. Avoid recurring costs that can spiral. Many AI tools have free tiers—start there. Certainty is about managing downside, not optimizing every penny of upside.
By taking these measured steps, even resource-constrained businesses can start unlocking AI’s benefits. The goal isn’t to be early. It’s to be efficient. And that starts by knowing what problem you’re solving.
Conclusion
AI adoption among small businesses may be gradual today, but all signs point to a larger role for these technologies in the near future. As awareness grows and AI tools become more affordable, Main Street companies that strategically implement AI stand to gain efficiency and a competitive edge. The barriers to entry are lower than ever, and ignoring AI entirely could carry a higher cost as industries evolve. In the end, the experts agree: the key is to start small, learn, and scale up carefully. Small businesses that embrace that approach will be well-positioned to thrive in an increasingly AI-enhanced marketplace.
Sources
National Federation of Independent Business
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