How UK SMEs are using AI to transform operations

Small businesses across the UK gathered in London last week for the SME AI Accelerator, a groundbreaking free training programme hosted by OpenAI, Enterprise Nation and Booking.com, designed to help entrepreneurs harness artificial intelligence for practical business growth.

The timing couldn't be better – new research from OpenAI shows that UK SMEs using AI are saving over half a day a week (5.2 hours), but those benefits aren't evenly shared, with gaps emerging across regions, business size, and how deeply firms are able to use AI in practice.

The accelerator offered hands-on training on using AI to boost productivity, save time and build practical business workflows, with participants hearing from OpenAI Academy experts and taking part in demos, build sprints, and peer learning sessions focused on applying AI to everyday business tasks, from customer communications and content generation to planning, operations and light automation.

The UK AI adoption gap

A survey of 1,000 UK SME decision-makers revealed that one in five SMEs (19%) still do not use AI at work at all, with the lack of usage highest amongst sole traders and micro businesses at 37% and 25% respectively.

The capability gap is stark: more than half of medium-sized firms that use AI automate tasks compared to 37% of micro businesses, while one in three use AI agents versus fewer than one in five micro firms.

Regional disparities are equally pronounced. Almost all businesses in London (93%) now use AI at work, but around one in four firms in regions including Yorkshire & Humber (26%), the South West (28%), and Scotland (24%) do not use it at all.

The research also highlighted demographic divides, with two in five SME decision-makers aged 55 and over not using AI at all (40%), compared with less than one in 10 of those aged 18 to 34 (8%). Technology leads adoption (95%), while almost one in three hospitality and leisure businesses (30%) don't use AI at all.

Benefits for early adopters

Among those using AI, 71% said it makes them more effective business leaders, with the most cited benefits being time saved (45%), reduced errors (34%), and lowered operational costs (24%).

The most popular tool was ChatGPT, used by 64%, ahead of Gemini and Copilot (42% each) and Claude (11%). Common uses include research and summarisation (47%), emails and business communications (42%), and brainstorming (39%). Time saved is being redirected into creative thinking (32%), strategic planning (30%), and improving products and services (30%).

However, barriers remain significant. Among businesses not using AI, over one in four (28%) pointed to training and skills as a barrier, while less than half of those aged 55 and over felt confident using AI (49%). Four in five UK SMEs say it matters that their teams are comfortable using AI (80%).

The event featured inspiring case studies from Enterprise Nation members who have successfully integrated AI into their operations, demonstrating the transformative potential for small businesses.

Charlotte is an extra pair of hands

Janan Leo, co-founder of Cocorose London, shared how AI saved her 19-year-old footwear business from potential collapse. After building organic traffic over 17 years, the company faced a crisis in late summer 2024 when its website traffic suddenly plummeted without explanation.

Janan explained:

"It was like a decimation of our organic traffic. We just thought, what the hell has just happened?"

After months of searching for answers and even rebuilding the entire website, salvation came through ChatGPT, which was called "Charlotte".

Janan continued:

"We started calling her Charlotte because this wasn't just AI – this was like a member of our team helping us find what this issue was."

Rather than accepting generic responses, Janan developed a collaborative approach with the AI, feeding it its unique expertise and constantly challenging it for better solutions.

"Charlotte's not going to know that I added two millimetres onto a sample for my own specific reasons. I need to feed that experience into the ChatGPT," Janan explained.

This approach helped them create content strategies that previously would have taken months with an agency – now completed in just a week.

"We got through Brexit, COVID, and the cost-of-living crisis – and so this was potentially a blow too far, but I have to say AI has given us renewed optimism," Janan reflected. "It's empowering small businesses to be able to compete on that much bigger scale without having the pockets that go as deep as the big boys."

ChatGPT told me not to expand in Europe yet

Becky Lane of The Floral Hire demonstrated how AI can provide strategic business guidance. When she won £10,000 at a pitch competition, her first instinct was to expand across Europe. Instead, she consulted ChatGPT for advice.

"I asked ChatGPT about expanding to Europe with the £10,000, and it said that amount wasn't enough," Becky explained. "It advised focusing on building our presence in the UK first, then expanding to Europe later. That completely changed our approach."

This AI-driven strategic pivot proved transformative for her artificial flower rental business.

She continued:

"ChatGPT basically told us to master our home market first. That advice helped us focus our limited resources where they'd have the biggest impact."

Since launching in 2024, the business has grown from Becky hand-delivering flowers by public transport to employing three freelancers and serving customers nationwide.

The human element remains critical

Polly Dhaliwal, COO of Enterprise Nation, who spoke at the event, emphasised the importance of maintaining authenticity while embracing AI:

"While AI will be transformative for small businesses, those that retain their human voice while making the most of what AI has to offer will be the ones that truly succeed.

"Technology should enhance, not replace, the personal connections and unique perspectives that make small businesses special."

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