Six classic mistakes to avoid when using AI for business

About a quarter of UK SMEs used some form of AI in 2025 (source: ONS), a 15 percentage point increase since September 2023. For large businesses (250 employees or more), the figure is 44%. Most are benefitting greatly. 

The Lloyds Bank Business Barometer puts overall AI use by UK businesses at the far higher figure of 59%, with 82% of them reporting increased productivity as a result, while 76% say it increased their profitability. More than half (56%) of UK businesses plan to make fresh investments in AI in 2026, with a quarter of non-users expected to start using AI this year. 

If your business is already using AI or you’re considering starting to use it soon, there are risks and common pitfalls. So, what six classic mistakes do you need to avoid?

One of the biggest myths is AI is a magic tool that has all the answers, one that will save you lots of time and money and solve all your problems. It isn’t and it won’t. Some fall into the trap of expecting AI to “do it all for you”, only to find out that isn’t the case. 

Some rely too much on AI, because it’s quick, free/cheap and it feels almost like having another team member. AI can even seem like it offers a lifeline when you’re really up against it. But AI does not get it right all the time.  

Need to know! AI can provide answers. It can help you to do more in less time, generate useful content or ideas and test your thinking. But AI has limitations and it cannot replace human judgement, emotional understanding, experience or expertise.

To get the best results when using generative AI, much depends on you. You must give clear, concise direction when inputting your prompts. You must be specific about exactly what you want.  So, instead of “write me a marketing plan,” you should type in “create a detailed 12-month online and offline marketing plan for a local gardening business targeting homeowners in West Bristol.”  

Need to know! AI can’t read your mind. If you type in a woolly prompt you’ll get an unfocused response, so always clearly state what you want and why. If necessary, refine subsequent prompts to get the exact information you need.

AI isn’t always right. In fact, sometimes it’s just plain wrong. It’s not trying to deliberately mislead you, of course, but it sometimes “scrapes” from flawed online sources. AI output may seem plausible and reliable, but it might not be. And AI can fail to understand nuance and context. It can invent details or scrape from outdated/incorrect information/data. Blindly copying, pasting and publishing AI-generated content isn’t advised.  

Need to know! Always review, edit and factcheck AI output (at least two other sources). Treat AI content output as a rough first draft. Be very careful if AI-generated content relates to legal, financial or regulatory matters. 

Using AI to automate tasks can save your business lots of time and money, but overdoing it can backfire. Common examples include using a chatbot to respond to online customer enquiries or using AI to generate customer emails, but your customer experience should never feel unnatural or obviously “AI-ed”. Many customers are attracted to small businesses for the personal touch they experience, which they often don’t get from larger brands.    

Need to know! Where possible, use AI to automate repetitive tasks that don’t require emotional intelligence (eg generating invoices, stock management, etc). If you use AI for customer service, also give people the option to communicate with a real human.

Using generative AI (eg Chat GPT, Copilot, Gemini, Claude, etc) for business is still a relatively new thing, but it’s becoming much more common. AI is also developing quickly, so assuming that your people will just “work it out themselves” isn’t advised. You should provide training and guidance if your business is to get the best outcomes when using AI. 

Need to know! AI training does not need to be formal or expensive, just simple and practical, helping your people to learn key dos and don’ts and better understand how to get the best results when using AI. 

If your business uses AI extensively without ever measuring whether it’s bringing any benefits, you won’t know if it’s worth your time or investment. In some cases it may not be. In others, it could be delivering great benefits. For example, if you use AI to write social‑media posts, are they performing better than the ones you used to create by hand? If you use AI for customer service, are satisfaction levels higher or lower? Measuring impact can enable you to use AI much more effectively.  

Need to know! Review your AI use in key areas every month and work out what difference it is – or isn’t – making. Adjust your approach where necessary.

You should think of AI as a practical assistant. Use it well in the right places and it can save you time and money, helping make your business more efficient, productive and profitable. It could also unlock new opportunities for your business. 

Use of AI in most areas by businesses great and small is much more common. AI still seems like a shiny, powerful tool that can bring a wide range of tangible benefits. In many ways it is. But like all other tools, it’s only as effective as the way you use it. By steering clear of common pitfalls, you can unlock greater value from AI and ensure that it genuinely supports your business goals and growth. 

Tech Adoption for Growth is a new, government-funded pilot programme offering free, practical digital support to help SMEs and sole traders in the South West get more value from digital tools. Eligible businesses are assessed and then randomly allocated to receive either one-to-one expert support or the opportunity to take part in expert-led workshops. To apply click here.