Liz Barclay
Lead on Small and Micro Businesses and Entrepreneurship
Small and micro business owners, founders and directors are enthusiastic about adopting AI, but not all use it yet or to their best advantage.
Small, micro and single‑person businesses are adopting AI quickly but unevenly. Their use varies from experimentation to full operational integration. Some latest figures are from 2025 and out of date:
- 14% of micro businesses use AI (DSIT)
- 9–14% of micros use generative AI (Helium42)
- 21% of micro/small firms use AI regularly when embedded tools count (Shotgun)
- 6% of micro/small firms have AI embedded into daily work (Shotgun)
- 54% overall use AI (BCC/Atos) but only 11% use it extensively (Shotgun)
It’s hard to measure AI adoption accurately. If you count embedded AI in Microsoft 365 or accounting software, it’s much higher than if you measure deliberate, intensive use. Many business owners don’t realise the tools they’re using are AI-driven.
Where AI can help smaller firms
AI is being used for everyday tasks like marketing (72%); admin (72%); customer service including chatbots and auto-responses (45%); analytics and reporting (46%); finance (29%); and sales and lead generation.
Sole traders and one‑director companies use AI for content creation, cutting admin time and communicating with customers. AI is an “extra pair of hands.”
There are barriers, though; some business owners can’t find or afford the skills
they need and don’t know which tools to invest in
The benefits are obvious once you’re using AI: productivity gains (75–87%), time savings, better marketing, lower costs and faster decision-making. So far, only 4% of AI‑using businesses report reduced headcount (ONS, 2025).
For micro firms, AI supplements labour rather than replacing it. However, given rising wages, NICs, rates and bills, it’s tough for young people to find jobs. That problem may grow as AI is applied to more tasks.
Barriers to adoption
There are barriers, though; some business owners can’t find or afford the skills they need and don’t know which tools to invest in. Non‑adopters worry about data security and return on investment. Only 12% of adopters report increased revenue so far.
Small and micro businesses are using AI, and it’s becoming an essential tool helping founders manage increasing workloads. As the pace of adoption increases, it will become crucial to businesses determined to stay ahead of the competition too.
