Only a quarter of North West-based small business leaders have a basic understanding of AI

• Only 27% of businesses in the North West said they have a basic understanding of generative AI
• Despite this, almost half of businesses in the region said their organisation pays for access to an AI tool (45%), highlighting an openness to AI adoption
• 60% of medium-sized enterprises use AI tools but this drops to 36% using the technology in micro businesses
• One business starting to explore AI is North West-based EZ Hampers

New research by Start Up Loans, conducted by YouGov, reveals less than half (46%) of UK small businesses use AI at work. Furthermore, a third (34%) of small business leaders only have a ‘basic understanding’ of AI tools.

On average, only 12% would refer to themselves as ‘expert’ in the technology, when thinking about their proficiency in five core pillars of AI: Generative AI, chatbots and virtual assistants, speech to text and vice versa, text analysis and summary, and AI-powered text editing. This figure is higher in the North West, with almost a fifth of businesses referring to themselves as ‘expert’ level (17%).

In the North West, the biggest barriers to further AI adoption were found to be IT security issues (20%) and a lack of appropriate financing possibilities (16%). Insufficient digital skills of employees (14%) was the third largest barrier.

Within UK smaller businesses there was a clear divide between those at the larger end of the spectrum and those at the micro end when it comes to using AI. The survey found AI is used in 36% of micro businesses (0-9 employees) and 44% of small businesses (10-49 employees) but rises to 60% of medium-sized enterprises (50-249 employees).

Lisa Storey, founder of EZ Hampers, is finding practical and creative ways to use AI in her growing hamper business. One of her main uses so far has been for writing job descriptions, ensuring she gets the wording right and presents her company in the best light. But beyond that, she’s found it to be a helpful source of inspiration during tougher times of entrepreneurship, like when fresh ideas can be hard to come by.

Lisa said: “I use it for job descriptions and also for some inspiration, as it’s hard at times to come up with the right words when you’re juggling everything. It gives me a bit of breathing space and helps me feel more confident in what I’m putting out there.”

As the demands of running a business continue to evolve, Lisa sees AI as a valuable support tool and something that helps her think clearly, make confident decisions, and reduce the pressure of doing everything alone. For her, it’s not just about efficiency, but about having a sounding board that’s always there.

Louise McCoy, Managing Director, Start Up Loans Products, British Business Bank said: “AI has the potential to transform the way smaller businesses operate, but people running those businesses face a plethora of barriers which need to be overcome if they are to benefit from the technology. We hope our information, as well as start-up financing, one of the biggest hurdles identified, can help drive more use of AI.

“By adopting AI responsibly, smaller businesses could unlock new opportunities for growth and innovation, ensuring they remain the driving force of the UK economy”.

Start Up Loans offers pre- and post-loan support packages, including access to Learn With Start Up Loans, a partnership with the Open University, with courses covering key aspects of running a business.

The Start Up Loans programme was established in 2012 to help people - wherever they are in the UK and whatever their background - to achieve their ambitions of starting their own business. It provides fixed-interest loans of between £500 and £25,000 to aspiring business owners, many of whom might otherwise struggle to secure finance.

For free advice on how to use AI to grow a business, please visit: Free AI tools to help grow your business.