Artificial Intelligence has shifted from a buzzword to a boardroom necessity. While Fortune 500 companies have made headlines with billion-dollar investments, a quieter revolution is underway: AI is becoming an equalizer for the lower middle market (LMM) — companies generating roughly $10M–$100M in revenue.

There are around 350,000 such firms in the United States. They’re family-owned manufacturers, regional distributors, specialty contractors, and service providers. They don’t have the budget for McKinsey or Accenture, but they represent the backbone of the U.S. economy — employing millions and powering industries in every state.

The question facing these firms is simple: adopt AI now, or risk being left behind.

Big Players Moving Down-Market

Large enterprises are already using AI to streamline supply chains, forecast demand, and personalize customer experiences. And as these efficiencies take hold, their impact cascades down the value chain. Customers are beginning to expect faster quotes, smarter service, and more responsive partners.

Recent research from Salesforce shows that 72% of companies worldwide used AI in at least one business function in 2024, up from ~50% in 2023. Adoption isn’t slowing — it’s accelerating.

For LMM firms, this creates a new urgency. If you’re not exploring AI now, your competitors — large and small — already are.

The Equalizer: Accessible, Affordable Tools

The good news? AI is no longer the exclusive domain of tech giants. Cloud-based solutions, generative AI assistants, and industry-specific SaaS tools are affordable and accessible.

A Goldman Sachs survey found that 68% of small business owners are already using AI, and more than 80% of those report improvements in productivity and efficiency. Many are saving 20+ hours per employee per month and cutting operating costs by $500–$2,000 monthly.

These aren’t futuristic promises — they’re immediate gains. And because AI scales with usage, the sooner you start, the faster those benefits compound.

What Falling Behind Looks Like

It’s tempting to wait. After all, the technology is evolving quickly, and budgets are tight. But waiting carries its own risks. In 12–24 months, quoting a customer in two days instead of two hours won’t just be “a little slower” — it will be a deal breaker.

Competitors who embrace AI will be able to serve more customers, with fewer people, at lower cost. They’ll have happier employees freed from repetitive tasks, and more engaged customers who get answers faster.

Those who don’t? They’ll face shrinking margins, employee frustration, and the slow erosion of market share.

The Inflection Point

The lower middle market is at an inflection point. AI isn’t a “nice-to-have experiment” — it’s a competitive necessity. And unlike large enterprises, LMM companies have an advantage: agility. You can test, learn, and roll out changes faster than a multinational weighed down by bureaucracy.

The window is open, but it won’t stay open long. AI adoption will soon be table stakes, not a differentiator.

Next Steps

If you’re leading a lower middle market business, now is the time to act. Start by identifying where AI can deliver quick wins in your operations, sales, or service. Better yet, bring in a partner to help you run an AI Opportunity Assessment.

This isn’t about boiling the ocean — it’s about finding two or three use cases that will save time, cut costs, and prove to your team that AI is a force for good. From there, you can scale thoughtfully.

The firms that act now will build resilience, profitability, and happier workplaces. Those who wait may find the gap too wide to close.

Ready to identify your quick-win AI use cases? Schedule an AI Opportunity Assessment and see what AI can do for your business.