How does ChatGPT think AI can help you start and run a business?

The Start Your Own Business podcast returned on 26 August with a brand new episode sponsored by Sage, the small business accounting software provider.

We spoke to AI expert Phil Hobden of Sage about how to use AI to start and run a business.

You can listen to our chat with Phil here.

After the episode went live, Spotify listener, Edward Money, thought it would be fun if we 'interviewed' ChatGPT directly.

Always up for a challenge, we thought it would be interesting to see what response we got from the AI titan. Here's what ChatGPT had to say on the subject.

[Note: we have not corrected the spelling to UK English, but we have removed ChatGPT's copious Emojis.]

What is artificial intelligence or AI?

Artificial Intelligence (AI) is the field of computer science focused on creating machines or software that can perform tasks that usually require human intelligence.

These tasks include things like:

• Learning (improving from experience or data)
• Reasoning (making decisions, solving problems)
• Understanding language (like chatbots or translation)
• Perception (recognizing images, sounds, or patterns)
• Acting (controlling robots, driving cars, playing games)

In short, AI is when computers are designed to “think” and act in ways that mimic human intelligence—though they do it with data, algorithms, and computational power instead of human brains.

How is AI different to automation?

Great question! People often confuse AI with automation, but they’re not the same thing. Here’s the difference:

Automation

• Rule-based: Follows fixed instructions set by humans.
• Doesn’t adapt: It repeats the same steps every time unless reprogrammed.
• Example: A washing machine cycle, payroll processing, or an assembly line robot that welds the same spot on every car.

Artificial Intelligence (AI)

• Learning-based: Uses data and algorithms to adapt, improve, and make decisions.
• Handles uncertainty: Can recognize patterns, adjust to new situations, or “figure things out.”
• Example: A self-driving car that reacts to traffic, or a voice assistant that understands and responds to natural language.

Key difference:

• Automation = doing tasks automatically, but always the same way.
• AI = doing tasks smartly, adapting and improving like a human would.

How common is AI these days?

AI is very common today—so common that many people use it daily without even realizing it.

Here are some ways it shows up in everyday life:

On Your Phone

• Voice assistants (Siri, Alexa, Google Assistant)
• Autocorrect & predictive text
• Face recognition to unlock your phone
• Photo enhancements (auto-filtering, background blur, object detection)

Online & Apps

• Search engines (Google using AI to rank results)
• Social media (feeds, friend suggestions, content moderation)
• Streaming services (Netflix, Spotify recommending shows/music)
• Shopping (Amazon suggesting what you might like)

In Transportation

• Navigation apps (Google Maps predicting traffic)
• Driver-assist & self-driving features (Tesla Autopilot, parking assist)

In Healthcare

• Medical imaging AI to help doctors detect diseases
• Chatbots for patient support

In Work & Business

• Customer service chatbots
• Fraud detection in banking
• AI tools for writing, coding, or design

In short: AI is everywhere—from the apps we use, to the products we buy, to the services we rely on. It’s becoming as normal as electricity or the internet.

What benefits can AI bring to small businesses?

AI can be a game-changer for small businesses, even if they don’t have huge budgets or teams. It helps them save time, cut costs, and compete with bigger companies. Here are some of the biggest benefits:

Efficiency & Automation

• Automates repetitive tasks (scheduling, invoicing, data entry).
• Frees up time so owners and staff can focus on higher-value work.

Better Customer Service

• AI chatbots can answer questions 24/7.
• Personalized replies improve customer experience without hiring more staff.

Smarter Marketing

• AI tools can analyze customer behavior to target ads more effectively.
• Email marketing platforms (like Mailchimp with AI) suggest the best times to send messages.

Cost Savings

• Reduces the need for large teams by handling routine work.
• Helps avoid wasted spending by analyzing what works best.

Data Insights

• Turns raw data (like sales trends, customer preferences) into clear insights.
• Helps make better decisions based on facts, not just guesswork.

Creative & Productivity Tools

• AI design tools (like Canva’s AI) help create logos, posters, or social media content quickly.
• Writing assistants (like Grammarly or ChatGPT) help draft emails, blogs, and product descriptions.

E-commerce Boost

• Product recommendation engines suggest items to customers (like Amazon does).
• AI inventory tools help predict stock needs so businesses don’t over- or under-order.

What are “generative AI tools” and how do they work?

Great question! Let’s break it down clearly:

What Are Generative AI Tools?

Generative AI tools are a type of artificial intelligence that can create new content—such as text, images, music, video, or even computer code—based on patterns they’ve learned from existing data.

Examples you might know:

• ChatGPT → generates text (answers, articles, ideas).
• DALL·E or MidJourney → generate images from descriptions.
• Synthesia → generates AI videos with virtual presenters.
• GitHub Copilot → generates computer code.

How Do They Work?

Generative AI is usually built on large language models (LLMs) or similar machine learning architectures. The process goes like this:

1. Training on Data
   • The AI is trained on huge datasets (text, images, music, etc.).
   • It learns patterns, styles, and structures in the data (like how sentences are formed or how a face looks).
2. Understanding Prompts
   • You give it an instruction (called a prompt) like:
     • “Write a business email to a new client.”
     • “Generate a picture of a cat surfing.”
   • The AI interprets what you want.
3. Generating Content
   • Instead of copying, it creates new combinations that match the style and logic of what it learned.
   • Example: If trained on millions of books, it won’t copy sentences but will create new ones that sound like they came from a book.
4. Refining with Feedback
   • Many tools use human feedback (like ratings, corrections) to improve accuracy and reduce errors.

Why They’re Powerful

• Can produce creative output quickly (minutes instead of hours).
• Works across different formats (text, images, code, music).
• Accessible to anyone—no need to be a programmer or artist.

Are there any possible downsides or dangers from AI?

Yes — while AI brings many benefits, it also comes with downsides and risks that people, businesses, and governments need to manage carefully.

Possible Downsides & Dangers of AI

1. Job Displacement

• AI and automation can replace certain human roles (like data entry, customer service, or factory work).
• This could hurt workers if reskilling opportunities aren’t available.

2. Bias & Fairness Issues

• AI learns from data — if the data is biased, the AI can also be biased.
• Example: Hiring AI unfairly favoring one group over another, or facial recognition being less accurate for certain ethnicities.

3. Misinformation & Deepfakes

• Generative AI can create fake text, images, or videos that look real.
• This can spread misinformation, scams, or political manipulation.

4. Privacy Concerns

• AI often relies on large amounts of data (emails, photos, medical records).
• Without safeguards, personal information could be misused or exposed.

5. Over-Reliance on AI

• If businesses or individuals trust AI blindly, errors can cause real damage.
• Example: An AI medical system making a wrong recommendation.

6. Security Risks

• Hackers can use AI to create smarter cyberattacks (like phishing emails that look very convincing).
• AI-powered tools can also be misused for harmful purposes.

7. Ethical & Control Issues

• Questions about who’s responsible if an AI makes a harmful decision (e.g., a self-driving car accident).
• Long-term worries about very advanced AI being hard to control.

Takeaway

AI is powerful, but it’s not risk-free. The key is to use it responsibly:

• Transparency (knowing when AI is being used).
• Human oversight (AI assists, but humans decide).
• Rules and regulations to prevent misuse.

The information that generative AI tools generate is only as good as the source information they scrape. What is information scraping?

That’s a really sharp observation. Let’s unpack it.

What is Information Scraping?

Information scraping (often called web scraping) is the process of automatically collecting data from websites or digital sources.

• Instead of copying text manually, a scraper (a program or bot) pulls information in bulk.
• The scraped data could be product listings, prices, news articles, research papers, or anything publicly visible online.

How It Works

1. A scraper program visits a webpage (like a browser would).
2. It identifies and extracts data (for example, all the product names and prices on an online store).
3. It saves the data into a structured format (like a spreadsheet or database).

Example

• A company might scrape travel websites to compare flight prices.
• A researcher might scrape online news articles to study media trends.

How This Relates to Generative AI

• Generative AI models (like ChatGPT or image generators) are trained on huge datasets.
• These datasets often come from a mix of licensed data, human-created training data, and publicly available information.
• When people say AI “scrapes the internet,” they mean:
  • During training, AI systems learn from large collections of text, images, or code — sometimes gathered with scraping tools.
  • The quality of the AI’s output depends on the quality of the training data. If the data is biased, outdated, or low-quality → the AI might reflect that.

Important Note

• Web scraping isn’t always legal or ethical. Some websites forbid it in their terms of service.
• AI companies typically use a mix of licensed data (paid for), open-source/public data, and synthetic data (created for training) — not just scraping random websites.

How might someone use AI when starting their own business?

That’s a fantastic question — AI can be a huge advantage for someone starting their own business, especially if they’re a solo founder or have a small team. It helps save time, reduce costs, and look more professional from day one.

Here are some practical ways entrepreneurs can use AI when starting a business:

Planning & Strategy

• Market research → AI tools can analyze trends, competitors, and customer behavior.
• Business plan drafting → AI writing assistants can help outline a plan or pitch deck.
• Financial forecasting → AI-powered spreadsheets and apps can predict costs, revenue, and break-even points.

Branding & Marketing

• Logo & design creation → Tools like Canva (with AI) or Looka can generate logos, social media posts, and ads.
• Content creation → AI can write blog posts, product descriptions, or ad copy.
• SEO optimization → AI tools suggest keywords to rank higher on Google.
• Social media management → AI schedulers can create and post content at the best times.

Sales & Customer Service

• AI chatbots → Answer customer questions 24/7 without hiring staff.
• Personalized recommendations → E-commerce AI can suggest products to customers like Amazon does.
• Email campaigns → AI tools (like Mailchimp with AI) improve subject lines and timing for better open rates.

Operations & Productivity

• Smart scheduling → AI assistants can manage calendars, book meetings, and send reminders.
• Document drafting → Contracts, invoices, or proposals can be generated faster with AI templates.
• Inventory management → AI predicts stock needs to avoid over- or under-ordering.

Learning & Support

• On-demand advice → AI tools can answer quick legal, marketing, or technical questions (though always check with a human pro for final decisions).
• Skill-building → AI tutors and learning platforms help entrepreneurs quickly learn about finance, coding, or design.

Key takeaway: AI gives a new business “superpowers” — letting one person do the work of a small team while staying lean and efficient.

Presumably, AI could help someone to estimate their start-up costs and work out whether their business idea is financially viable?

Exactly — AI can absolutely help with estimating start-up costs and testing whether a business idea is financially viable.

Here’s how:

Estimating Start-up Costs with AI

AI-powered tools can:

1. Generate cost checklists → Based on your type of business (e.g., café, online store, consultancy), AI can list likely expenses:
   • Rent, licenses, insurance
   • Equipment, supplies, software
   • Marketing, website, branding
   • Staff (if any) and wages
2. Pull real-world data → Some AI tools integrate with databases or web scraping to give local price ranges (like average rent or salary costs in your city).
3. Spot hidden expenses → AI can flag costs new founders often forget (legal fees, taxes, software subscriptions).

Checking Financial Viability

AI can help you test if your idea is realistic:

• Cash flow forecasts → AI can project monthly income vs. expenses.
• Break-even analysis → Estimate how many sales you need to cover costs.
• Scenario planning → AI can model “what if” situations (e.g., slower sales, higher rent, faster growth).
• Profitability insights → Identify if the margins are too thin or if prices need adjusting.

Example

Imagine you want to start a small coffee shop. An AI assistant could:

• Suggest typical start-up costs in your area (espresso machine, rent, licenses).
• Estimate monthly operating costs (supplies, utilities, staff).
• Forecast revenue based on foot traffic and average customer spend.
• Show how long it might take before you start making a profit.

The Catch

AI is great for estimates and planning, but:

• It’s only as accurate as the data it’s given.
• It can’t replace financial advice from an accountant who knows your local market and regulations.

How could AI be used to help a small business to win new business and new customers?

Great question — winning new business and new customers is where AI can give small businesses a real competitive edge. Here are some practical ways:

1. Smarter Marketing & Lead Generation

• Targeted ads → AI tools (like Meta Ads or Google Ads with AI) analyze customer behavior to show ads to the right people at the right time.
• Content creation → AI writes blog posts, social media captions, and ad copy that attract attention.
• SEO optimization → AI suggests keywords and helps small businesses rank higher on Google.

2. Personalized Customer Engagement

• Chatbots & virtual assistants → Answer questions instantly on websites, increasing the chance of capturing leads.
• Email marketing → AI tools like Mailchimp or HubSpot personalize subject lines and content to boost open rates.
• Product recommendations → Just like Amazon, AI suggests relevant products or services, increasing conversions.

3. Data-Driven Insights

• Customer behavior analysis → AI finds patterns in who buys, when they buy, and why.
• Lookalike audiences → AI can identify people similar to your best customers so you can target them too.
• Sales forecasting → Predict which leads are most likely to convert.

4. Relationship Building

• AI-powered CRM tools (like Salesforce Einstein or Zoho with AI) help track interactions with prospects and remind you when to follow up.
• Sentiment analysis → AI monitors social media and reviews to see what customers like (or don’t like), so you can adapt your pitch.

5. Professional Branding on a Budget

• AI design tools → Create eye-catching ads, logos, or proposals that make a small business look bigger and more polished.
• Proposal writing → AI can help draft sales pitches tailored to different client needs.

Key takeaway: AI helps small businesses find the right people, talk to them in the right way, and follow up at the right time — boosting their chances of winning new customers without needing a big sales or marketing team.

How might a business owner use AI to save time and money, and become more profitable?

Absolutely — AI can be a powerful tool for saving time, cutting costs, and boosting profits, especially for small business owners juggling multiple roles. Here’s a detailed breakdown:

1. Saving Time (Efficiency & Productivity)

• Automating repetitive tasks → AI can handle invoicing, scheduling, payroll, and email responses.
• Customer service automation → Chatbots answer common questions 24/7, freeing staff for higher-value work.
• Content creation → AI generates social media posts, newsletters, product descriptions, and reports quickly.
• Data analysis → AI can analyze sales, customer behavior, and market trends in minutes instead of hours.

2. Reducing Costs

• Lower staffing costs → AI can replace or assist roles that involve repetitive, time-consuming work.
• Smarter marketing spend → AI targets ads to the right audience, reducing wasted ad dollars.
• Inventory management → AI predicts stock needs, preventing over-ordering or stockouts.
• Energy & resource optimization → AI can monitor utilities or production processes to save money.

3. Boosting Revenue & Profitability

• Personalized marketing & recommendations → Increases sales by offering the right products to the right customers.
• Lead scoring & sales forecasting → Helps sales teams focus on the most promising leads.
• Dynamic pricing → AI can suggest optimal pricing based on demand, competition, and seasonality.
• Upselling & cross-selling suggestions → AI identifies opportunities to increase the average order value.

4. Improving Decision-Making

• Quick insights from data → AI turns raw data into actionable insights.
• Scenario planning → Test “what-if” situations to see which decisions maximize profit.
• Risk management → AI can predict potential problems like late payments or supply chain disruptions.

Key takeaway:

AI helps a business work smarter, not harder. By saving time, cutting costs, and making smarter decisions, small businesses can increase profitability without necessarily expanding staff or capital investment.

Copyright 2025. Fiona Prior, host of the Start Your Own Business podcast 'interviewed' ChatGPT. These are the answers ChatGPT gave to our questions.