AI usage in small and micro businesses Is on the rise and with SME businesses looking to leverage AI, making the right choices can be difficult.
The SME – AI usage in small and micro businesses
Small and micro businesses typically those with fewer than ten employees represent the vast majority of UK enterprises and a significant portion of its workforce Hot Source CreativeTechRadarsmallbusinessbritain.uk.
By 2025, approximately 62% of UK small businesses are using AI tools, most commonly in marketing (47%), operations (17%) or customer service (8%) arXiv+12smallbusinessbritain.uk+12East Midlands Business Link+12. A growing share of micro‑businesses are also beginning to adopt AI, though some still report cost or complexity as barriers ProfileTree.
Adoption is accelerating: in 2025, 37% of UK SMEs (including small businesses up to 250 employees) reportedly use AI—up from 20% in 2024 IONOS.
investing – AI usage in small and micro businesses
Investment in AI also rose sharply: between 2022 and 2024, SMB investment in AI tools grew five‑fold, delivering projected annual savings of over £29,000 per business by 2025—particularly via improvements in customer communications TechRadar.
However, uptake remains constrained. Only 12% of SMEs have invested in AI‑related staff training, with 52% citing a lack of internal skills, and confidence is markedly lower among micro firms (37% versus 82% in medium‑sized firms)TechRadar.
A Government taskforce report (July 2025) highlights that while many SMEs recognise AI’s potential, smaller firms often lack the confidence, expertise and tailored support needed to implement it effectively GOV.UK.
The real world impact
Real‑world impact is already evident: a University of St Andrews analysis, based on nearly 10,000 SME interviews, suggests AI adoption can boost productivity by 27–133%, for example through automated staff rostering or reduced food waste in hospitality settings The Times. Google pilot programmes indicate that enabling AI usage can save workers 122 hours of admin time per year, potentially contributing £400 billion to the UK economy if adopted widely Reuters.
Economically, the gains could be transformative: Microsoft‑partnered research projects generative AI uptake among SMEs could yield £78 billion in productivity gains by 2035 WPI Strategy+1Microsoft UK Stories+1.
Typical use‑cases in small and micro businesses include content generation (e.g. ChatGPT for marketing copy), AI chatbots for customer support, simple analytics, and automating routine admin—all offering accessible “quick wins” for non‑technical founders The Timessmallbusinessbritain.uk.
consumer trust – AI usage in small and micro businesses
Consumer trust also influences AI strategy: only 23% of consumers over 55 are comfortable with AI‑generated communication versus 49% of younger consumers, underscoring the need for transparency and quality control in customer‑facing AI tools TechRadar.
Finally, business sentiment is positive: nearly 49% of UK small business leaders are already using or planning to adopt AI, and many are budgeting for efficiency and automation tools to stay competitive The Times.
Closing thoughts
AI adoption in UK small and micro businesses is growing rapidly, unlocking cost‑savings, efficiency and productivity gains. But adoption remains uneven especially at the micro level and is held back by cost concerns, skill gaps, lack of training, and trust issues. Greater access to training, government support tailored to smaller firms, and transparent, responsible deployments are essential to bridge the gap and enable AI’s broad potential for growth. Here at Holdcroft Digital Marketing, AI is a daily topic for clients. And its integration is becoming far more accessible to SME businesses. Let’s talk about how AI can improve your business processes.
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