AI Governance for Small Business: A Practical No-Bureaucracy Approach
Executive Summary
- Small businesses need AI governance, but not enterprise-scale bureaucracy
- The core requirement: know what AI you're using and manage the obvious risks
- Start with three essentials: an AI owner, acceptable use guidelines, and basic data rules
- Scale governance as AI use grows—don't overbuild for current needs
- The 2-page policy approach: simple, understandable, enforceable
- Governance should take hours to set up, not weeks
- Even lean governance significantly reduces risk and enables scaling
The SMB Governance Minimum: Three Essentials
Essential 1: An AI Owner
One person responsible for AI in your organization—answers questions, handles concerns, keeps leadership informed.
Essential 2: Acceptable Use Guidelines
Written guidance on how employees can and cannot use AI.
Essential 3: Basic Data Rules
Clear rules: what data can go into AI tools, what cannot.
Decision Tree: SMB AI Governance Approach
The 2-Page AI policy Template
[COMPANY NAME] AI USE GUIDELINES
APPROVED AI TOOLS: [List your approved tools]
WHAT YOU CAN DO
✓ Draft emails and content (review before sending)
✓ Research and information gathering (verify accuracy)
✓ Brainstorming and ideation
✓ Code assistance
WHAT YOU CANNOT DO
✗ Input confidential or customer data
✗ Send AI content without review
✗ Make significant decisions on AI alone
DATA CATEGORIES
GREEN: Public info, general questions
YELLOW: Internal business data (ask first)
RED: Customer data, personal info (never)
IF SOMETHING GOES WRONG
Contact [AI Owner] immediately.
Setting Up Governance: A 4-Hour Process
| Hour | Activity | Output |
|---|---|---|
| 1 | Inventory tools, assign owner | AI inventory spreadsheet |
| 2 | Draft guidelines | Policy document |
| 3 | Review and approve | Approved policy |
| 4 | Communicate and train | Informed team |
Checklist: SMB AI Governance
Setup
- Inventory current AI tools
- Assign AI Owner
- Draft guidelines
- Get leadership approval
- Communicate to employees
Ongoing
- Review inventory quarterly
- Update approved tools as needed
- Address incidents promptly
- Refresh training annually
Frequently Asked Questions
Next Steps
Stop overthinking governance. Spend 4 hours setting up the essentials. You can always expand later.
Book an AI Readiness Audit with Pertama Partners for practical, right-sized guidance.
Related Reading
- AI Governance 101: What It Is and Why It Matters
- AI Governance Policy Template (Full Version)
- AI for Small Business: A No-Nonsense Getting Started Guide
Frequently Asked Questions
If anyone uses AI for work, basic guidelines help. Having something in place from the start is easier than retrofitting later.
