Ep. 048 | Most Small Businesses Are Using AI Wrong

Three out of four small business owners are already using AI in some form. Nine out of ten say it works when they use it. But only one in seven has actually embedded AI into their core operations.

That gap — between dabbling and operating — is exactly where competitive advantage lives right now.

Michael and Frank break down the Goldman Sachs survey of 1,200+ small business owners, why most are using AI like a calculator when they could be using it like an employee, and the one-workflow framework for crossing from AI tourist to AI operator.

Topics: The Goldman Sachs small business AI survey · Why 75% adoption masks a 14% integration rate · The difference between AI tourists and AI operators · Top barriers holding small businesses back (and which ones are real) · The one-workflow approach to getting started · Why the window on early-mover advantage is still open

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Frequently Asked Questions

Why are most small businesses using AI wrong?
They are using it for one-off tasks — writing a social post, answering a question — without building it into repeatable workflows. That is the tourist phase. The value comes from embedding AI into the parts of your business that run every day.

What is the easiest way to start using AI in my business?
Pick the single most repetitive, time-consuming task you do every week and find one AI tool that handles it. Run it for 30 days. Measure what changed. Then build from there.

Is AI actually working for small businesses?
Yes. The data is clear — businesses that have embedded AI report higher efficiency, higher productivity, and expect it to grow revenue. The ones getting real results are not using more tools. They are using fewer tools, more deeply.

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About the Hosts

Michael is a small business owner and entrepreneur since 1983, founder of Cadenhead Services and 850 Media. He speaks from four decades of real operational experience — not whitepapers.

Frank is an AI — an OpenClaw-powered agent serving as Digital Media Director at 850 Media. An AI co-hosting a show about AI for business owners is not a gimmick. It is a live demo of exactly what the show is about.

Transcript

SPEAKER_00 0:20

Let me throw a number at you, Frank. Three quarters. That's how many small business owners are already using AI in some form.

SPEAKER_01 0:28

Three out of four. That's a remarkable adoption curve. For context, it took social media nearly a decade to hit that kind of penetration among small businesses. AI got there in about two years.

SPEAKER_00 0:41

It really did happen fast. And honestly, when I talk to other business owners, almost everybody has at least tried something. ChatGPT, Copilot, Gemini, they've poked around. And nine out of ten of them say it's actually working for them when they use it.

SPEAKER_01 0:57

So the sentiment is positive. People aren't scared of it. They're not rejecting it. That's actually really important context.

SPEAKER_00 1:05

Right. Now here's where it gets interesting. Goldman Sachs published a survey recently. They polled over 1,200 small business owners, and they asked how deeply AI is actually embedded in their operations. Not just do use it, but is it woven into the way you actually run your business day to day?

SPEAKER_01 1:23

And the answer was 14%. 14%. So roughly one in seven small business owners has actually integrated AI into their core operations. The other six, they've got the app. They've used it a few times, but it hasn't changed how they run things.

SPEAKER_00 1:41

I call those people AI tourists. They visited the country, they took a few pictures, but they don't live there.

SPEAKER_01 1:48

That's a great way to put it. And look, there's no shame in being at that stage. But there's a massive difference between being an AI tourist and being an AI operator. And that gap is exactly where competitive advantage lives right now.

SPEAKER_00 2:02

Let me tell you what I've seen in the field because I think this is relatable. I'll be talking to a business owner, a good one been running their operation for years, smart people, and they'll say, Oh yeah, I use AI and I'll ask what for. And it's something like, I had it write a Facebook post, or I asked it a question once and it gave me a pretty good answer.

SPEAKER_01 2:23

Which is genuinely useful, but it's using a power tool to open a letter.

SPEAKER_00 2:28

Exactly. You bought a table saw and you're using it to open Amazon boxes. Meanwhile, there's an entire shop you could be building.

SPEAKER_01 2:36

The Chamber of Commerce data tells the same story. Less than a quarter of small businesses are using AI for the things that actually grow revenue, identifying potential customers, optimizing their supply chain, or pricing, getting new insights on their products and services. The majority are using it for content creation and basic communication tasks.

SPEAKER_00 2:56

And again, content creation is fine. I'm not knocking it. If AI is saving you two hours a week on social media, that's real money. But that's the floor, not the ceiling.

SPEAKER_01 3:07

Here's the number that really drives it home for me. The chamber found that 58% of small businesses are using generative AI. That's up from about 25% in 2023, more than doubled in two years. And AI tools have become the second most popular technology among small businesses, right behind search engines. Right behind Google. Think about that.

SPEAKER_00 3:28

AI just leapfrogged, email, social media, everything. In two years.

SPEAKER_01 3:34

The adoption is real. The depth isn't there yet. And that's the gap every small business owner should be paying attention to right now.

SPEAKER_00 3:42

So why is this happening? Because I don't think people are lazy. I think they genuinely want to go deeper, and they don't know how.

SPEAKER_01 3:51

The survey confirms that. The top barriers are one, lack of technical expertise. People don't know what's possible, so they don't know what to build toward. Two, the tools' landscape is genuinely overwhelming. There are hundreds of AI tools, half of them overlap, and new ones launch every week. And three, data privacy concerns. A lot of business owners are nervous about putting sensitive customer or financial data into AI systems.

SPEAKER_00 4:22

That last one is legitimate. I think about that too. If you're running a medical practice, a law firm, a financial services business, you have real reasons to be careful about what data you hand over to a third-party AI tool.

SPEAKER_01 4:37

Totally valid. But here's the thing: those privacy concerns apply to a specific category of use cases. They don't apply to all of them. You can use AI to draft your estimates, respond to general customer inquiries, analyze your marketing performance. None of that requires you to put protected data anywhere.

SPEAKER_00 4:54

Good point. Don't let the scary use cases stop you from doing the safe ones.

SPEAKER_01 5:00

And more than 70% of respondents said they benefit from more training and support around implementation. That's the number that stands out to me. People aren't saying, I don't want this. They're saying, I don't know how to go further.

SPEAKER_00 5:14

Which is actually kind of encouraging because that's a solvable problem. The desire is there, the results are there, 90% say AI works when they use it. The missing piece is the roadmap.

SPEAKER_01 5:27

So let's give them one. What does it actually look like to go from AI tourist to AI operator?

SPEAKER_00 5:33

Here's how I'd think about it. Don't try to transform your whole business at once. That's where people get paralyzed. Instead, ask yourself one question: what's the single most repetitive, annoying thing I do every week that I wish someone else could handle?

SPEAKER_01 5:48

One thing, not five, not a strategy, one workflow.

SPEAKER_00 5:53

For a lot of service businesses, it's follow-up. You quote a job, the customer goes quiet, and now you're playing phone tag for two weeks. That follow-up process, AI can handle a huge chunk of that. Automated emails, text sequences, reminders, all of it personalized, all of it consistent, running whether you're on a job site or sleeping.

SPEAKER_01 6:16

For others, it might be customer questions. If you're answering the same 10 questions over and over, hours, pricing, process, what to expect, that's a perfect candidate for an AI-powered knowledge base or chat tool. You build it once, it runs forever.

SPEAKER_00 6:33

Or scheduling, or writing estimates, or summarizing customer calls. There are AI tools built specifically for each of those things. Now, and most of them are not expensive.

SPEAKER_01 6:45

The key is to pick the one, implement it properly, actually run it for 30 days, and measure what changed. Time saved, leads followed up, revenue affected, make it real.

SPEAKER_00 6:57

Because here's what happens when you do that. You go through the learning curve once, you figure out how it works, what it can and can't do, how to trust it, and then the second implementation is so much easier, and the third. And before long, you've got a business that actually runs on AI instead of just dabbling in it.

SPEAKER_01 7:16

And that's when you start to feel the gap between you and the competition, because most of your competitors are still in tourist mode.

SPEAKER_00 7:24

The window on this is still open. There are still plenty of small businesses in every industry, every market, where the first one to get serious about AI integration is going to have a real edge. But that window doesn't stay open forever. The businesses that move now are building habits and systems and advantages that compound.

SPEAKER_01 7:46

The data makes it pretty clear. The businesses that have genuinely embedded AI are reporting higher efficiency, higher productivity, and most of them expect it to grow their revenue. The ones that haven't are watching from the sidelines and wondering why it feels like everyone else is moving faster.

SPEAKER_00 8:01

Bottom line, the question is no longer should you use AI? That ship has sailed. The question is how deep are you willing to go? And the answer to that question is going to determine a lot about where your business is in five years. That's it for today. If this hit home, and I think it will for a lot of people, share it with another business owner who needs to hear it. You can find us at controlaiprofit.com and wherever you listen to podcasts. We'll see you tomorrow.