How to Measure AI ROI in a Small Business

The simple formula

Monthly value = (hours saved per month × your loaded hourly cost) − subscription cost − time spent fixing output.

Loaded hourly cost means wages plus the employer costs on top, not the hourly rate on the payslip. If the work is yours, use what an hour of your time is worth doing something else.

Your baseline worksheet

• Task name — write it as a verb: "chase unpaid invoices".
• Times per week — count for one real week, do not guess.
• Minutes per time — measure the slow version, including interruptions.
• Who does it — and their loaded hourly cost.
• Error rate today — how often does it need redoing?
• Implementation cost — hours to set up, plus anything you paid.
• Subscription cost — monthly, including seats you added.

A worked example

Quote follow-up takes 12 minutes and happens 15 times a week: 3 hours a week, roughly 13 hours a month. At a $35 loaded hourly cost that is about $455 of time. With drafting help it takes 4 minutes, so about 9 hours a month comes back — around $305 — minus a $25 subscription and roughly an hour a month of checking. Call it $245 a month, and be honest that the first month will be worse while you learn.

Recovered capacity only counts if you use it

Saving nine hours a month is worth nothing if those hours vanish into more email. Decide in advance what the recovered time is for: more quotes sent, faster delivery, or an earlier finish on Fridays. Write it down before you start.

Count quality, not just speed

• Fewer missed follow-ups is revenue, even when it saves no time.
• More errors that reach a customer wipes out the time saved.
• Faster but blander customer replies can quietly cost you work.

Common questions

How long before AI pays for itself?

For a single well-chosen workflow, usually within the first month or two — or not at all. If it has not paid back by day 60, the workflow was the wrong choice.

Should I count the time I spend learning the tool?

Yes, as implementation cost. It is a real cost, but it is one-off, so keep it separate from the monthly figure.