Online & technology · Guide

Using AI tools in a small business

AI tools can take hours of writing, admin and research off your week. They can also confidently get things wrong, leak information you didn't mean to share, and put your reputation at risk. Here's where AI genuinely helps a small business, and how to use it safely.

AUSBUSINESS
Last reviewed · 5 min read

In short

  • Start with low-risk, high-time tasks - drafting emails, quotes, social posts and documents, summarising, and planning.
  • Always keep a person in charge. Check every fact, figure and promise before it reaches a customer.
  • Don't put personal, confidential or customer information into public AI tools. Use business versions with clear data settings.
  • Write a one-page AI policy - which tools, for what, what never goes in, and who checks the output.
  • The federal government's Guidance for AI Adoption gives a simple six-practice framework for using AI responsibly.

What AI tools are good at, and what they’re not

Today’s AI assistants (such as ChatGPT, Claude, Copilot and Gemini) are very good at working with words and structure: drafting, rewriting, summarising, explaining, brainstorming and organising. Many also work with spreadsheets, images, documents and, increasingly, carry out multi-step tasks.

They are not reliable sources of truth. They can invent facts, figures, laws and references that sound completely convincing. Treat an AI tool like a fast, capable junior assistant who has never met your customers and sometimes makes things up: useful, but you check the work.

Where AI helps most in a small business

Writing and communication

  • First drafts of emails, quotes, proposals, job ads, policies and website pages
  • Replies to common customer questions, in your tone
  • Turning rough notes into a tidy document, or a long document into a short summary

Marketing

  • Social media posts and a content calendar
  • Product descriptions and service pages
  • Ideas for offers, campaigns and blog topics
  • Rewriting copy for different audiences

Admin and operations

  • Meeting notes and action lists
  • Checklists, procedures and staff instructions
  • Organising data in spreadsheets, and writing formulas
  • Comparing quotes or contracts side by side, so you know what to ask

Planning and thinking

  • Pressure-testing a business idea or plan
  • Preparing questions for your accountant, lawyer or bank
  • Exploring “what if” scenarios in a forecast

AI agents

Newer AI agents can carry out tasks rather than just write: booking appointments, answering routine enquiries, processing simple orders, or chasing invoices, often inside software you already use. They can save real time, but they act on your behalf, so start with low-stakes tasks, limit what they can access, and check their work closely until you trust them. Our guide to hiring your first employee looks at when an AI agent might cover a task instead of a hire.

How to start: a 30-day plan

  1. Week 1: pick three tasks that eat your time and don’t involve sensitive information (for example, social posts, quote emails, meeting notes).
  2. Week 2: try one tool on those tasks. Save the prompts (instructions) that work well.
  3. Week 3: build a prompt library, a shared document of your best prompts, with notes on your tone, your services and your customers, so results are consistent.
  4. Week 4: review. How much time did it save? What went wrong? Write your AI policy (below) before involving anyone else.

Getting better results

  • Give context. Who you are, who it’s for, what you want, the tone, and the length. “I run a two-person plumbing business in Ballarat. Write a friendly 100-word email to a customer explaining that their hot water system part is delayed by a week.”
  • Give examples of your own writing so it can match your voice.
  • Ask for options and pick the best.
  • Iterate. “Shorter”, “plainer”, “more formal”, “add a call to action”.
  • Ask it to check itself. “What in this draft might be inaccurate or need checking?”

The risks to manage

Accuracy

AI tools can be wrong in ways that sound right. Check every fact, price, date, law and promise before it goes to a customer, into a contract, or onto your website. Your business is responsible for what you publish, under the Australian Consumer Law, whoever or whatever wrote it.

Privacy and confidential information

The Office of the Australian Information Commissioner (OAIC) has guidance on using commercially available AI products. A sensible rule, and the OAIC’s best-practice position: don’t enter personal information into publicly available AI tools.

  • Don’t paste in customer details, staff records, health information, bank details, passwords or confidential contracts.
  • If you need AI for business data, use a business or enterprise version and check where data is stored, whether it’s used for training, and how to switch that off.
  • Tell customers if they’re dealing with an AI chatbot, and make it easy to reach a person.

Security

Criminals use AI too, to write convincing scam emails and fake voices. “It sounds professional” is no longer a sign that a message is genuine. Keep verifying payment changes by phone. See Cyber security and backups.

Copyright and originality

Check that AI-generated images and text don’t copy someone else’s work or brand, and don’t publish AI content as if it came from real customers, experts or reviews.

Over-reliance

Keep the skills and knowledge your business depends on. Use AI to speed up work you understand, not to replace understanding.

A simple framework: the government’s six practices

The National AI Centre’s Guidance for AI Adoption (published October 2025) sets out six essential practices. Its Foundations version is written for organisations starting out or using AI in low-risk ways:

  1. Decide who is accountable for how AI is used.
  2. Understand the impacts and plan accordingly.
  3. Measure and manage the risks.
  4. Share essential information with the people affected, such as customers and staff.
  5. Test and monitor how the tools perform.
  6. Maintain human control.

For a small business, that can be as simple as the one-page policy below.

Your one-page AI policy

  • Approved tools: which AI tools the business uses, and on which accounts.
  • Good uses: drafting, summarising, brainstorming, admin (list your examples).
  • Never put in: customer personal information, staff records, passwords, bank details, confidential contracts.
  • Always check: facts, figures, prices, legal or safety statements, and anything going to a customer.
  • Be open: tell customers when they’re talking to an AI chatbot.
  • Who’s responsible: the owner (or a named person) for approving new tools and reviewing this policy every six months.