Seventy-four percent of small business owners now use artificial intelligence, up from 64% in 2025, according to Homebase’s 2026 Main Street AI Gap Report. The same survey shows a widening divide. Businesses with $5 million or more in revenue adopt AI at a much higher rate than those earning under $500,000, a pattern federal data confirms.
Key Takeaways
- Homebase surveyed 750 small business owners and operators, and 89% of AI users reported a positive effect on their business.
- AI adoption reached 81% among businesses with $5 million or more in revenue, compared with 54% among those under $500,000.
- Owners using AI for both scheduling and payroll reported saving an average of 7.7 hours and $343 per month, or more than $4,100 a year.
- The U.S. Census Bureau’s Business Trends and Outlook Survey found AI use across all U.S. businesses between 17% and 20% from December 2025 to May 2026.
- Census data show 37% of firms with at least 250 employees use AI, while fewer than 20% of firms with four or fewer employees do.
- Among non-adopters in the Homebase survey, 62% remain interested in AI but cite data privacy (38%) and errors (31%) as their top concerns.
The Homebase Survey Shows Adoption Rising Among Main Street Owners
Homebase, a San Francisco-based workforce management software company, released its 2026 Main Street AI Gap Report on September 22. The survey of 750 small business owners and operators found that AI adoption rose 10 percentage points in one year, from 64% in 2025 to 74% in 2026.
Satisfaction among users was high. Eighty-nine percent of small business decision-makers using AI reported a positive impact, and 87% said AI saved them time. The report places those findings against the scale of the sector. The U.S. Chamber of Commerce counts 33.2 million small and midsize businesses, which account for nearly half of U.S. economic activity.
The headline number, however, is less significant than the breakdown underneath it. The Homebase data show that business size and revenue, not owner age, determine who is adopting AI.
Revenue and Headcount Separate AI Users From Non-Users
The revenue gap is large. Among businesses with $5 million or more in annual revenue, 81% use AI. Among businesses earning under $500,000, the figure falls to 54%. That 27-point difference means the smallest businesses are the least likely to benefit from tools that can reduce administrative costs.
Headcount shows the same pattern. Adoption ranged from 57% at businesses with five to nine employees to 84% at those with 50 to 99 employees. Larger small businesses typically have more room in their budgets to test software, more staff to absorb a learning curve, and more administrative work to automate.
Age made little difference. Across decision-makers aged 18 to 59, adoption stayed between 70% and 80%. That finding challenges the assumption that younger, more tech-oriented owners are driving AI adoption on Main Street.
Scheduling and Payroll Show Measurable Returns
The Homebase report quantifies savings in two back-office functions. Owners who use AI for both employee scheduling and payroll reported saving an average of 7.7 hours and $343 per month, which adds up to more than $4,100 a year.
Those functions matter because errors in them are costly. More than one in ten small business decision-makers surveyed said scheduling mix-ups or payroll mistakes cost them $2,000 or more per month. Homebase Founder and CEO John Waldmann said that when those errors happen, owners’ “time and money go out the door.”
For a business with a few employees and thin margins, $4,100 a year is a meaningful amount. It can cover a month of payroll for a part-time worker, an equipment repair, or several weeks of inventory. The savings come from routine administrative tasks, not complex AI deployments, which suggests the practical entry point for many small businesses is operational software rather than advanced tools.
Census Data Puts Business AI Use Much Lower
Federal data tell a different story on overall adoption. The U.S. Census Bureau’s Business Trends and Outlook Survey, which samples about 1.2 million businesses every two weeks, found that AI use among all U.S. businesses stayed between 17% and 20% from December 2025 to May 2026. As of May 3, 2026, the national rate was 19.8%.
The Census Bureau’s size data match the direction of the Homebase findings. Thirty-seven percent of firms with at least 250 employees reported using AI, compared with 32% of firms with 100 to 249 employees and fewer than 20% of firms with four or fewer employees. Between December and May, AI use increased among firms with at least 20 employees but did not change significantly among firms with fewer than 20.
Sector differences are also wide. The Census Bureau reported AI use of 39.7% in the Information sector and 33.9% in Finance and Insurance, compared with about 14% in Retail Trade. Many Main Street businesses, including shops, restaurants, and service providers, fall into the lower-adoption categories.
Survey Definitions Explain the Gap Between 74% and 20%
The difference between Homebase’s 74% and the Census Bureau’s roughly 20% comes down to what each survey measures and who it asks. The Census Bureau asks whether a business used AI in any business function during the previous two weeks, a narrow standard adopted in November 2025. Before that change, the question focused on AI used in producing goods or services.
The Homebase survey measures self-reported AI use among owners and operators, a broader definition that can include occasional use of a chatbot or AI features built into existing software. The Homebase respondent pool also focuses on businesses with hourly teams, which does not necessarily represent the full business population.
Neither figure is wrong. They answer different questions. A Federal Reserve note published in April found similar differences across surveys, citing a Census estimate of about 18% of firms alongside a separate survey estimating that 78% of the labor force works at firms that have adopted AI. For business owners comparing themselves with peers, the more useful point is that both data sets agree on the size gap, even though they disagree on the overall rate.
Trust Is the Main Barrier for Non-Adopters
The Homebase survey suggests that resistance to AI is less about cost or access than about trust. Among owners not yet using AI, 62% said they remain interested. The top concerns were data privacy, cited by 38%, and the risk of mistakes, cited by 31%.
Those concerns carry more weight for small businesses than for large ones. Payroll data, employee records, and customer information are sensitive. Small businesses generally lack dedicated compliance or IT staff, so a single data breach or payroll error can do significant harm to a small operation.
Owners Expect AI to Support Growth, Not Replace Workers
Small business owners in the Homebase survey were more than twice as likely to expect AI to help their business grow (49%) as to expect it to reduce the number of employees they need (22%). Respondents described growth in practical terms, such as staying open later, serving more customers, and opening new locations.
That view contrasts with the concern about job losses that often dominates coverage of AI in large companies. For many small businesses already operating with minimal staff, automation is more likely to take over tasks nobody has time for than to eliminate positions.
The Adoption Gap Raises Competitive Questions for Smaller Businesses
Taken together, the Homebase and Census data point to a divide by business size. Larger small businesses are adopting AI faster, gaining back-office savings, and moving further ahead of smaller competitors. The smallest firms, which have the least margin for error, are adopting AI at the slowest rate.
The same pattern is visible at the top of the economy, where AI-driven gains have concentrated wealth among chipmakers and large technology firms. On Main Street, the stakes are smaller in dollar terms but similar in direction. Businesses that can afford to experiment are pulling ahead of those that cannot.
For owners of businesses under $500,000 in revenue, the data suggest looking at scheduling and payroll first. Those functions have measurable returns and relatively low risk compared with customer-facing tools, and they are where the Homebase survey recorded the clearest savings.
Disclaimer: This article is for informational purposes only and does not constitute financial, business, tax, technology, or professional advice. The AI adoption rates and reported savings cited are based on specific surveys with different methodologies, definitions, and respondent populations, so they should not be treated as directly comparable measures of overall U.S. business AI adoption. Reported time and cost savings are survey averages and may not apply to every business. Business owners should evaluate their own operational needs, data privacy requirements, costs, and risks before adopting AI tools.
FAQs
What percentage of small businesses use AI in 2026?
Homebase’s 2026 Main Street AI Gap Report found 74% of small business owners use AI. The U.S. Census Bureau’s Business Trends and Outlook Survey, which uses a narrower definition, found AI use between 17% and 20% across all U.S. businesses.
Why do AI adoption surveys show different numbers?
Surveys measure AI use differently. The Census Bureau asks whether a business used AI in a business function in the past two weeks, while other surveys measure broader self-reported use by owners, which includes occasional or experimental use.
How much can small businesses save with AI?
Homebase survey respondents using AI for both scheduling and payroll reported average savings of 7.7 hours and $343 per month. That totals more than $4,100 a year.
Do larger small businesses use AI more?
Yes. Homebase found 81% adoption among businesses with $5 million or more in revenue versus 54% among those under $500,000. Census data also show higher AI use among larger firms.
What stops small businesses from adopting AI?
Among non-adopters in the Homebase survey, the top concerns were data privacy at 38% and the risk of mistakes at 31%. Sixty-two percent of non-adopters said they remain interested in AI.
