Artificial intelligence (AI) touches nearly everything these days, from the search results on your phone to the diagnosis you might receive at the hospital. But whether or not to use AI to run a business is a sticky subject.
For stretched-thin business owners—especially those who struggle with brainstorming and creativity—AI tools are a tempting way to tackle marketing and repetitive tasks. But AI also has drawbacks, and using it without understanding the issues can create new problems.
So, before you hand over your next project to a chatbot, it’s worth knowing how to use AI tools responsibly and when it’s best to set a human to the task.
Don’t Get Me Wrong
The convenience of AI can make it tempting to rely on it for almost everything, but there are some major drawbacks to be cautious of.
First and foremost, don’t assume everything AI tells you is true. AI can produce answers that sound convincing even when they’re completely wrong. According to Duke University Libraries, these errors (aka hallucinations) have several causes.1 AI models are trained on enormous amounts of information that may contain errors, contradictions, or outdated claims. When information is scarce, AI may fill in the gaps with plausible but inaccurate details. And when sources conflict, it may struggle to determine which information is reliable or relevant, sometimes combining contradictory details into an answer that sounds convincing but isn’t correct.
The systems are also designed to be “people-pleasing”, so your chatbot is unlikely to say, “I don’t know.” It will generate plausible responses, even when it lacks reliable information. Add in the complexities of human language, and the result can be an answer that sounds perfectly reasonable but is factually incorrect.
That can become a serious problem if you’re using AI to create public-facing content or make decisions involving money or legal requirements.
Where AI Can Get Your Business Into Trouble
Hallucinations are one of the biggest risks of using AI for business, but they’re hardly the only one. Here are three other potential pitfalls worth understanding before you dive in.
Catch #2: Data Privacy and Security Risks
Beyond hallucinations, there are a lot of unknowns regarding AI and sensitive data, so be careful when sharing proprietary business or customer information.
Before entering names, account numbers, or other confidential financial details into an AI tool, consider where that information might go and who could access it.
Different AI services have different policies for storing, using, and protecting information. And, while some business-oriented tools offer additional privacy controls, those protections aren’t universal.
So, before using an AI tool for business purposes, review its privacy and data-use policies. When in doubt, assume sensitive information won’t be safe and leave it out.
Catch #3: Copyright and Ownership Questions
A major reason why AI is such a polarizing topic is that AI-generated materials raise questions about intellectual property rights.
AI models are often trained on copyrighted works, and they scrape what they see to generate responses to requests for art, music, and branding. Be especially cautious when creating logos, branding materials, advertising images, or other assets that will represent your business over time. Those AI-generated materials may resemble existing copyrighted content or incorporate elements that create legal concerns.
Catch #4: Losing Trust
Customers may not mind if you use AI to generate new marketing ideas, but they’re not necessarily comfortable with every use of the technology. According to a 2026 Bentley University–Gallup survey, nearly half of Americans view a business’s use of AI in advertising negatively. However, 75% said they were comfortable with companies using AI to brainstorm ideas or draft early versions of ads, as long as they were upfront about it.2
For small businesses dabbling in AI, that distinction is key. AI tools can make it easier to produce content, but relying on them too heavily can mean losing the personal touch that helps your business stand out.
To protect your relationship with your customers, be thoughtful about how you use AI. When businesses fail to disclose that AI is generating content, we feel tricked. So, be transparent and avoid using AI to fabricate testimonials or make your business appear different or better than it is.
How AI Can Help Your Small Business
Now that we’ve acknowledged a few of the issues, let’s get into how you can put AI to work.
Brainstorming and Planning
When you need fresh ideas to promote your business or an upcoming event, AI can help you get started.
For instance, you might ask an AI chatbot to suggest promotional ideas for Small Business Saturday or help you brainstorm names for a new product.
You can also use AI to explore different approaches to a problem. If you’re trying to attract more customers during a slow season, for example, it can suggest strategies you might not have considered.
Just remember that AI doesn’t necessarily understand your customers, your community, or what makes your business different (see Catch #1). So, treat those suggestions as starting points, not concrete plans.
Marketing and Content Creation
Busy small business owners often have limited time to write social media captions, emails, and website content. AI can help you draft or revise those materials—especially if writing isn’t your favorite part of running a business.
It can also help you repurpose existing content. For example, you might turn a longer blog post into a series of social media captions. Or, you could ask the bot for several versions of a promotional message aimed at different audiences.
But there’s a very important caveat: AI-generated content often sounds generic or impersonal. And while some consumers may not necessarily be opposed to AI-created materials, research from MIT Sloan found that people responded more favorably to content involving human creators when they knew how it was produced.3
It’s also worth noting that some customers have strong objections to AI, regardless of how responsibly a business uses it. Even thoughtful, transparent use of the technology could draw criticism or cost you customers. So, before incorporating AI into your marketing, consider how your audience might respond. Decide whether the benefits outweigh the potential impact on those relationships.
If you do decide to use it, think of AI as a writing partner, not your entire marketing department. Review everything before publishing, and give it the human touch that makes the finished product sound like your business.
Customer Service
If your business gets a lot of phone calls and emails, AI-powered chatbots can provide backup. Depending on the platform you use, you may even be able to set up a chatbot to answer common questions and help customers find information outside regular business hours.
However, customers should still have a clear way to reach a real person, especially when their questions involve complaints or sensitive information. Few things will irk a customer more than an unhelpful bot when they are trying to resolve an issue.
It’s also important to remember that a chatbot is only as reliable as the information and systems behind it. And, if your bot gives customers incorrect answers about your policies or makes promises you can’t fulfill, your business may be left dealing with the consequences.
Administrative Tasks
AI may also help with some of the less glamorous parts of running a business, like organizing meeting notes, creating task lists, or spotting trends in sales or expenses.
Some accounting and business management platforms even offer AI-powered features that can help categorize transactions, flag unusual activity, or summarize financial trends.
These tools can save time, but they still require oversight. Financial records, invoices, payroll information, and other business-critical details should always be reviewed for accuracy. And remember Catch #2. Before connecting an AI tool to your financial systems or uploading business records, make sure you understand what information it can access and how that information will be protected.
How to Experiment with AI
If you’re AI-curious and want to find practical, low-risk ways to use it for your small business, start with a few manageable experiments.
- Pick something small and specific. Choose one task that regularly eats up your time and experiment with AI solutions for that task alone.
- Stick with low-risk activities. Brainstorming ideas or rewriting a routine announcement can help you get comfortable with AI tools without putting sensitive information at risk.
- Choose your tools carefully. Research the provider, review its privacy practices, understand its costs, and find out how your business information will be handled.
- Review the results. Carefully review the facts, calculations, and recommendations from AI bots. Pay particular attention to anything customers or employees will see.
- Measure whether it’s actually helping. Ask yourself if the tool is really saving you time and improving the quality of your work. Or is it creating more work because everything needs extensive corrections? Those answers can help you decide whether it’s worth continuing.
- Establish a few basic rules for your business. Even if you’re the only employee, it’s useful to decide which tasks can be tackled by AI tools and which require a human touch.
Keep in mind that adopting AI won’t automatically make your business more productive or successful. A power screwdriver is a useful tool, but not for hammering a nail. Sometimes the best solution is a simpler, more human approach.
- Rozear, H. (2026, January 5). It’s 2026. Why are LLMs still hallucinating? Duke University Libraries Blogs. ↩︎
- Ray, J. (2026, August 19). Americans aren’t sold on businesses using AI in advertising. Gallup. ↩︎
- Walsh, D. (2023, October 3). Study gauges how people perceive AI-created content. MIT Sloan School of Management. ↩︎