In most small and mid-sized businesses, you'll see a familiar pattern: too many tools, too many vendors, and too many people doing work that no longer needs to be done.
They've survived because their owners and operators are resourceful. They wear multiple hats make quick, practical decisions and find workarounds when systems fall short. But over time, that resourcefulness carries at a cost.
Context-switching kills productivity. Makeshift processes create admin drag. And decisions made without systems eventually lead to complexity and even more drag. Over time, these habits have layered into operational bloat—costs that quietly eat into margin and slow down growth, no matter the size of the business.
It’s not a failure of the owner or operator. It’s a failure of the tools. The reason it’s happening is that most SMB software wasn’t built for how these businesses actually work. The options are either too generic, too clunky, or priced for enterprises and so out of reach.
But that’s starting to change.
As AI becomes more mainstream and accessible, we’re finally seeing tools built for how SMBs actually operate, solutions that:
- Work end-to-end, not just in silos
- Works in the background, with minimal human interaction
- Offer broad capabilities in specific business contexts
- Eliminate manual work instead of just reshuffling it
And that unlocks something important. Because whether an SMB is trying to grow or stay steady, it now has access to AI that can deliver real support that’s affordable, easy to implement and delivers real outcomes quickly. Not as hype. Not as theory. But as quiet infrastructure that creates space for higher-value work by taking care of the administrative manual work and reducing inefficiencies.
Wasted Time + Wasted Spend = Wasted Potential
At a high-level looking down, most inefficiency in SMBs falls into three buckets:
1/ People doing the wrong work.
Teams are overstaffed in the wrong places; not by choice, but because the right tools aren’t in place. So businesses do what they can and fill the gap with people:
- An accountant chasing down missing documents
- A sales rep copy-pasting the same email all day
- A manager manually tracking payments across spreadsheets
These are smart, experienced people. But if you’re running the business, it’s hard not to cringe. Talent is expensive.
And yet, most of their time is spent on low-value tasks that AI and automation are now capable of handling.
You’re paying top talent to do work someone at half their salary could handle or better yet, that software should already be doing. It’s not just inefficient, it’s expensive; and it pulls your best people away from the work only they can do.
2/ Vendors no one remembers choosing.
After a decade building SMBs—and speaking to hundreds through Vera—this pattern is still everywhere. Over time, tools and services pile up: software subscriptions, outsourced vendors, consultants. Auditing any of it feels like a “we’ll get to it” task. But because it doesn’t feel urgent, it gets pushed aside—while inefficiency quietly eats away at the budget.
Once a vendor is embedded, it often stays—unused, unaudited, unquestioned. Great for the vendor. Bad for the bottom line.
30–40% of software subscriptions in SMBs go unused. Source.
And it’s not just software. A 2023 report by Spendesk, based on 5,000 SMBs across the UK, France, Germany, and Spain, found that the average SMB has nine times more suppliers than employees and only actively uses about 25% of them.
Each unused supplier costs a business an estimated £855 per year, which adds up to nearly £1 billion in wasted admin and management costs across the sample. That’s roughly $1.1 billion USD.
And remember, that’s just in four European countries. Imagine how that scales across the 33 million SMBs in the U.S.
The core issue is that small businesses often rely on outsourced support for cash flow flexibility or added expertise but rarely have the time or resources to actively manage or review those vendors.
And that’s where the waste creeps in. When margins matter, every dollar counts. But what should be a lean, well-managed vendor stack quietly becomes bloated—full of hidden spend, dormant subscriptions and underused tools.
And there’s a cost no one talks about enough: opportunity cost.
What better, more affordable solutions are you not using simply because you think the current setup is “good enough”. There are smarter, more cost-effective options hiding behind the recurring charges no one has time to revisit. So the cycle continues because: “That’s just how we’ve always done it.”
Habits stick. Even when they’re outdated. Even when they’re expensive. And over time, they quietly become part of the operating model, long after they’ve stopped making sense.
3/ Time lost to the daily grind.
Everyone knows what this looks like:
Email ping-pong. Double data entry. Chasing the same client for the same document, again. Digging through folders to find one missing file before a deadline.
It all feels small, until it isn’t. A slow leak that turns into a lake of wasted hours and lost margin. You won’t see it on a P&L. But it’s there: dragging down productivity and stretching already-thin teams even thinner. Most business owners don’t realize how much it’s costing them, because the noise has become normal. But reducing that noise is one of the fastest ways to improve margins.
In the age of automation and AI, improving margin isn’t optional, it’s what gives SMBs stability, sustainable operations, and growth, if they want it.
Less Waste, More Margin: Where AI Can Help
Most SMBs aren’t broken they’re just burdened. Too many tools, too much manual work and too little time to address it. Small changes, powered by the right AI partner, can create a big impact.
If you’re running an SMB, AI doesn’t need to mean transformation it can simply mean less waste.
Start by asking:
- Where are smart people doing repetitive work?
- What tools are costing you money but delivering no value?
- Which tasks would you want to delegate, however small, instead of doing them yourself?
You can start small, but it's important to start. Instead of starting from a place of creating a full AI strategy, instead start by spotting where the friction exists.
Then replace it with systems that work hard. As hard as you do.
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