How much time could you save with AI?

Did you know that AI is transforming UK micro businesses, with 25% using it to save 540 hours annually, that's about 14 weeks of work a year!*

Welcome to the first edition of the AI for SMEs newsletter; if you run a small or medium-sized business (or work in one!), then this is where you'll discover how AI tools and technology can help you save time, save money, and change how your team adds the most value.

At Alcea Consulting Limited | Artificial Intelligence we're talking to businesses, just like yours, all the time about AI. We understand the journey you're on because we've been on it too.

Spotlight on the Budget

Now we really can't not mention that budget. Especially with the focus it had on SMEs. So in a nutshell here are the budget items we feel are the most important for you, our fellow SMEs to know about.

• Increase in National Insurance Contributions (NICs): Employers' NICs will rise from 13.8% to 15%, with the threshold lowered from ￡9,100 to ￡5,000. This change means SMEs face higher payroll costs, particularly for lower-wage employees.
• National Minimum Wage Hike: The minimum wage will increase to ￡12.21 per hour by April 2025. SMEs will need to budget for higher wage bills, which may impact staffing levels and hiring plans.
• Corporation Tax Reforms for Small Profits Rate: Small businesses with profits under ￡250,000 will still see a tax rate of 19%, but those above this threshold face higher rates, up to 25%. This tiered approach places added pressure on growing SMEs to manage tax burdens effectively.
• Fuel Duty Freeze and Temporary Fuel Discount Extension: Fuel duty is frozen, and the temporary 5p fuel duty cut remains in place. This helps SMEs that rely on transportation by providing some relief against rising operational costs.
• Enhanced Investment Incentives: Increased incentives for R&D tax credits and full expensing on capital investments aim to encourage SMEs to invest in innovation and growth. These policies offer a tax break on qualifying expenditures, making investment in equipment and technology more attractive.
• Capital Gains Tax (CGT) Increase: CGT rates rise from 10% to 20% (basic rate) and from 18% to 24% (higher rate) for disposals after 30 October 2024. SME owners may face higher taxes when selling assets or exiting the business, impacting exit planning.
• Business Rates Adjustments: Some reliefs for business rates continue, helping SMEs in sectors like retail and hospitality manage their premises costs. However, overall rates may still rise, depending on property valuations.

These changes create a mix of increased operational costs while raising payroll and tax liabilities. There is some good news in the mix too. Some sectors, such as hospitality, will benefit from business rate adjustments, and there are some incentives for specific R&D initiatives, too. But the big one is of course, it's going to be much more expensive to employ staff. And, with SMEs being the backbone of the UK's business market this is a big hit for all businesses, especially SMEs with tight margins. So how can you help offset these new costs?

How can AI help your business off-set the UK Budget?

• Automating Routine Tasks: AI can take over repetitive administrative duties, like data entry and invoicing, reducing the need for extra staffing and lowering payroll expenses associated with basic tasks.
• Enhancing Customer Service: AI chatbots provide 24/7 support, answering common customer queries instantly and allowing customer service teams to focus on complex issues. This helps SMEs maintain high service levels without needing additional staff.
• Streamlining Recruitment Processes: AI-powered recruitment tools can screen CVs, shortlist candidates, and even handle initial communication, significantly cutting down the time and resources required for hiring, which is particularly valuable as wage costs rise.
• Optimising Inventory and Supply Chains: AI can analyse sales and demand patterns to better forecast inventory needs and optimise ordering, reducing waste and ensuring stock levels align closely with demand, which can help control supply chain costs.
• Personalising Marketing Efforts: AI-driven insights can target customers more precisely, improving the return on marketing spend and helping SMEs achieve more with less, thus reducing the need for extensive marketing teams.

AI: Is it an affordable solution?

Yes. AI can be an affordable solution for SMEs in the UK, as off-the-shelf AI tools are increasingly accessible and designed to meet specific business needs without requiring extensive customisation. Many AI solutions, such as chatbots, marketing automation, and data analytics tools, are available on subscription models, allowing SMEs to pay monthly or annually without a large upfront investment.

This flexibility makes AI cost-effective, helping businesses streamline operations, improve customer service, and make data-driven decisions at a fraction of the cost of traditional enterprise solutions. Additionally, with ongoing advancements and competition in the AI market, prices for these tools are becoming more affordable, enabling SMEs to harness the power of AI without stretching their budgets.

Finding a trusted partner on this journey can be invaluable, allowing your team to focus on their day jobs while the business benefits from targeted, effective technology solutions.

Putting AI into practice: An AI adoption success story

I founded Alcea in 2017 as a communications and content agency. We worked with some big brands and household names such as Virgin Media, Sky, and National Grid, as well as family-run firms from pubs and tea rooms to travel agents. Basically, if it was a business and they had a problem with their words reaching the right people - Alcea was able to help. We crafted content, devised plans, and developed strategies to get the right information to the right people. And we were merrily continuing that until November 2022, when everything changed.

Because it was then that OpenAI launched Chat GPT. Now, I, like a lot of creatives, had a bit of a panic and resolutely ignored the media hype for as long as possible (it turns out it wasn't that long), as by early 2023, I thought I should try to pull my head out of the sand and see what all the fuss was about. And, immediately, I was hooked. I realised instantly that this was a tool that was going to be a game-changer for our work. And it was. In the space of a year I'd adopted AI-first principles in our content creation using Chat GPT and Google's Gemini (both free versions) to work as a technological assistant, creating first drafts that would then be edited. This meant that Alcea was able to double, yes double, our clients in just 12 months, increase our revenue to almost double, and not work any extra. Today we're a growing team who use AI tools across pretty much every aspect of our business. But what we achieve with four people and AI is probably the equivalent of seven! From finance tools, to marketing to planning - there's an AI tool to help us, speed things up and keep costs down.

Alcea was Alcea's first business AI adoption success story. And since then we have moved to pivot our business to helping other SMEs, like ours, like yours to reap the rewards of AI adoption.

Where you can chat to us next...

Alcea has a stand #1430 at The Business Show in London 13th and 14th of London, and I'm speaking at the event! Come and join me on 13th November to discover: "Is there an AI tool for that?" tickets are free!

At Alcea, we’re dedicated to helping SMEs navigate the AI journey, from tool selection to implementation. Our expertise is tailored to ensure SMEs leverage AI in a way that aligns with their unique needs—without the complexities often associated with the technology. By working together, we can help your business unlock the strategic benefits of AI to stay competitive, customer-centered, and future-ready. To keep up to date with the latest ways AI tools can help your business subscribe to this new monthly newsletter!

Final thoughts...

AI offers immense potential for SMEs, from freeing up time on repetitive tasks to providing predictive insights. As accessibility and affordability rise, now is the time to consider AI’s role in your business. Start with a small tool, solve a specific problem, and see how AI can enhance your operations and fuel your growth.

Ready to start your AI journey? Connect with us to learn how we can support your SME’s growth with tailored AI solutions.

*By Andrew Gradon August 20, 2024, Posted in Artificial Intelligence, Audience, Sales, Technology