One question I hear constantly from small business owners is: “How much is AI actually going to cost me?” The honest answer? Probably less than you think. But the real question should be: “Am I spending money in the right places?”
Here’s the reality most people won’t tell you. The biggest cost of AI integration isn’t the technology. According to HP’s recent survey of Australian small businesses, only 15% say they lack budget for AI tools. The real barriers? Skills and mindset readiness (53%), complexity and integration challenges (44%), and finding tools that actually fit their needs (54%). In other words, most businesses aren’t struggling to afford AI. They’re struggling to adopt it properly.
The Real Cost Categories
Most small businesses can get access to fantastic AI tools for under $100 per month in software subscriptions. Most AI platforms such as Microsoft CoPilot, ChatGPT, Claude and Canva have free versions you can use. If you need to expand your usage, you are looking at anywhere between $15 to $50 per month per platform which in the grand scheme of things is totally worth it for the value it brings.
The trap? Signing up for six different AI tools because they each promise something slightly different. Pick three that solve your actual problems and ignore the rest. Also be careful of what plans you sign up for. I’ve seen businesses waste money on enterprise-level tools when starter plans would do. I’ve seen sole traders paying for software designed for companies with 500 employees. Start with free tiers. Graduate when you hit genuine limits, not imagined ones.
I would also recommend setting up a spreadsheet so you can track what you have actually subscribed to. If you have a team, set up an AI email everyone can access, that you can use for subscriptions. This means you don’t waste money on multiple accounts, especially when you are testing new platforms.
Hardware is where things get tricky. If you have the wrong tech, i.e. an old laptop (over 4 years old) using AI can actually become inefficient because your tools can’t handle the horsepower required to run the latest programs. I had a laptop that was around 5 years old and kept crashing whenever I tried to use multiple AI programs. The constant restarting was not only frustrating but it cost me valuable time. Since I upgraded, I have been able to 10X my daily output with ease.
Now the tech industry loves telling you that you need the latest AI-ready device with specialised chips. But here’s what HP’s research revealed: 4 in 5 SMBs don’t fully understand what AI PCs actually do. If you’re a design agency running complex image generation locally, sure, invest in processing power. But if you’re using cloud-based AI tools? Your current laptop might be fine. The rule of thumb: if your AI runs in a browser, you don’t need new hardware. Once business owners actually understand AI PC capabilities, they’re more than twice as likely to see the value in upgrading. Education first, purchase second.
Training is the cost most businesses forget to budget entirely. With 57% of SMBs struggling with tech adoption and integration, this isn’t surprising. Budget time for your team to learn proper prompting, workflow integration, and troubleshooting. Also encourage them to spend at least 30 minutes a week trying and testing new AI tools and features. That time investment compounds. Skip it, and you’ll join the majority who buy tools they never properly use.
Making Smarter Decisions
What do SMBs actually want from AI? HP’s survey found the top motivators are refreshingly practical: affordable to implement (42%), easy to set up (41%), and guaranteed data privacy and security (37%). That’s not asking for miracles. That’s asking for tools that respect the reality of running a small business.
Match your tech to that reality. A boutique retailer doesn’t need the same setup as a professional services firm. Start with one problem AI could genuinely solve. Master that- then expand.
Here’s what makes this worth the effort: enterprise AI users report not just productivity gains, but improved work-life balance (69%) and reduced stress and burnout (68%). For time-poor business owners, that’s the real ROI.
If you want practical, jargon-free guidance on navigating how AI can help your business, the Byte Size podcast, which I co-host with Dr Matt Agnew, covers exactly these questions. We speak with real Australian SMBs about what’s actually working, what hardware you need (and don’t), and how to avoid the costly mistakes everyone makes.
The bottom line: AI doesn’t have to be expensive. But it will be if you don’t know where your money should actually go.
Contributed by Lisa Teh, Founder and Director of CODI Agency