How to use AI to help start a business

Starting a business has become easier, thanks to technologies such as artificial intelligence (AI).

Once the domain of tech giants and large corporations, a wide range of affordable AI tools are available to aspiring start-up owners.

From generating ideas to automating daily tasks, AI can be your virtual business buddy, helping you work smarter, not harder.

These could be integrated into tools you already use, such as the AI functions in Google Workspace or standalone AI tools like ChatGPT or Otter.ai.

And you’ll be in good company, a 2024 global survey reported that 72% of businesses use AI for at least one business function.

For more information about the types of AI platforms available, read about the free AI tools to help grow your business.

How to use AI to start a business

There are many ways to use AI when creating or launching your start-up.

It’s worth noting that AI is there to act as a tool to support your business venture, rather than being used to make decisions for you.

Let’s explore ways you could use AI to help realise your business dreams.

1. Generate business ideas

Coming up with a viable business idea is often the first hurdle for an aspiring entrepreneur.

AI can help by analysing market trends, consumer behaviour, and gaps in the market.

Here are some effective prompts to use with AI tools like OpenAI’s ChatGPT or Google Gemini:

• ‘analyse current market trends in [your area of interest] and suggest five innovative business ideas that could meet unmet customer needs.’
• ‘what are some emerging business opportunities in [industry] based on current consumer behaviour changes?’
• ‘suggest creative business ideas that cater to pet owners in urban environments’
• ‘identify gaps in the market for [specific customer group] and suggest potential business solutions’.

AI could help refine your business ideas by analysing industry data to identify trends and market gaps.

By examining consumer behaviour and market reports, AI can help suggest ideas that may align with current customer demands.

Some AI platforms can also highlight what has been judged to have worked for similar businesses, helping to validate your ideas and reduce the risks of starting a new business.

2. Carrying out market and competitor research

Market research can play a vital role when starting a business, helping you to avoid costly early mistakes.

It involves understanding your target market and conducting competitor research to understand what others are doing in your space.

AI may be able to help streamline this once time-consuming and expensive process, potentially making it quicker and more affordable.

You could use AI tools to:

• analyse large amounts of data
• get insights into consumer behaviour and preferences
• refine pricing strategies by examining market conditions and competitors.

Using AI in market research could give you a deeper market understanding and support your decision-making.

Useful AI prompts to try:

• ‘create a detailed customer persona for [your product/service], including demographics, pain points, and buying behaviours.’
• ‘what are customers’ main complaints about existing [products/services] in my market?’

Remember – AI is only as good as its data, and the algorithms that drive it, so interpreting results and filling gaps yourself is necessary. 

You may also need to validate the sources of that data.

AI-based business you could start

AI can not only assist in brainstorming a business idea, but could also be the foundation of the business itself.
It offers opportunities to explore starting a business focused on digital products, which could include:

• eBooks
• royalty-free music
• digital training courses
• AI-generated images and designs.

AI could also speed up the prototyping, testing, and feedback processes involved in creating new products, making them more efficient and cost-effective.

AI tools could also help you create different use cases that your products might encounter in real life, and analyse user feedback.

These valuable insights could help you make adjustments so your products meet customer needs.

Create your brand with the help of AI

Effectively branding your small business could be essential for its success.

Your brand’s identity could influence how well you connect with your target customers and how they engage with your business, whether through repeat purchases or recommendations.

When branding your start-up, consider elements such as colours, logos, values, and tone of voice.

Using AI could perhaps help you to identify the most appealing brand elements for your audience, suggesting colour schemes, logos, and designs that appeal to potential customers.

To create your brand messaging, AI tools could generate compelling and consistent content that aligns with your brand’s voice and values.

In the future, you could perhaps use AI again to help you rebrand your business.

Optimising business operations

Starting a business often involves handling many repetitive and time-consuming tasks.

This could include bookkeeping, scheduling appointments, inventory management, or customer service.

AI could free up your valuable time by automating these processes, allowing you to focus on growing your business.

For instance, AI-driven scheduling tools can automatically arrange meetings, and automated bookkeeping software can help you manage your finances.

An AI-powered inventory management system could also help you to monitor stock levels effectively, preventing overstocking or shortages.

In customer service, AI tools like chatbots can improve customer satisfaction by offering instant responses to common questions.

Integrating AI into your operations could lead to fewer mistakes and significant cost savings.

Make smarter business decisions

Using AI could empower you to make smarter decisions by providing insights into your start-up’s operations.

AI tools could analyse sales data to reveal patterns and trends that might not be immediately obvious.

This could help you to make more informed decisions, potentially with a higher likelihood of success.

With this information, you could forecast demand for your products or services and adjust operations accordingly.

You could also track key performance indicators (KPIs) to assess how effective your strategies are.

AI dashboards and analytics platforms can make complex sales data more accessible, which could be particularly helpful if you’re running a start-up.

These types of tools can present data in clear, visual formats that are easy to understand.

Marketing your small business

Marketing your start-up is key to attracting new customers.

AI could play a significant role by creating content and automating campaigns.

Some AI tools can handle marketing tasks automatically, potentially saving you time and money.

For instance, you could use them to help draft customer emails, ensuring they reach the right audience at the right time.

Website personalisation can adapt content based on visitor behaviour, creating a more engaging experience.

Depending on your customer relationship management (CRM) tool, AI could help you segment your customers into groups so you can tailor your marketing to them.

Read our seven top tips for marketing your start-up business.

Pros and cons of using AI when starting a business

Using AI when starting a business could offer several benefits and challenges:

Pros

• efficiency – AI could automate repetitive tasks, streamlining your operations
• cost-effective – it could reduce the need for overheads, such as saving on staff hiring costs
• data insights – it could offer valuable insights for informed decision-making
• personalisation – it could improve the customer experience through tailored interactions and marketing.

Cons

• initial costs – could involve investment in software and training
• complexity – integration could be challenging without technical expertise
• bias and transparency – AI systems can sometimes lack transparency and could introduce bias into decision-making
• data privacy – could require careful management to protect customer data.

Getting started with AI

Consider beginning by deciding where AI can add the most value to your business.

You might start by looking for bottlenecks in your business operations and opportunities where AI can boost efficiency.

Think about repetitive tasks or areas that can benefit from data analysis.

When choosing AI tools, consider their cost and compatibility with your existing software.

Learn more with our guide to how AI can help small businesses.

Using free trials could be one way to determine if an AI tool works for you without any unnecessary investments.

Consider the ethical use of AI and data protection best practices and regulations – see the UK government’s AI playbook.

You may also want to be transparent with your customers about data privacy and where your business uses AI to encourage customer trust and positive brand awareness.

If AI is new to you, you could look for training programmes or online forums that could provide support and insights into which tools could work best for you.

• Google offers beginner’s AI courses
• The Open University has a free introduction to artificial intelligence course
• FutureLearn also has a range of AI courses to choose from.