Note: In the first part of this discussion, Using ChatGPT in a Small Business, I talked about how we’ve been using ChatGPT in our small CPA firm. That post amounted to a laundry list of tasks and projects we’ve used ChatGPT for.

ChatGPT Tip #1: Start Today

My first tip. Start today. In fact, before you read another paragraph, open your browser, enter chatgpt.com into the address box, click the Signup button, and then follow the on-screen instructions. Sign up for the $20 a month option to start.

Once you’ve done this, start using ChatGPT in place of the Google or Bing search engine. And start asking it the questions you might have in past asked a friend, a co-worker, or some online forum.

ChatGPT Tip #2: Use Detailed Prompts

You know how to use a search engine like Google. And ChatGPT sort of works the same way. You can type in a simple question.

But what you want to do with ChatGPT? Provide much more detail. My typical initial prompt probably runs 100 to 200 words. I provide background information. I explain my current understanding. If appropriate, I may cite or quote sources like a blurb from an Internal Revenue Code statute or from a Treasury Regulation. I also provide instructions for ChatGPT. I might ask for it to provide links to its source, for example. Or for a table that summarizes its analysis or its answers.

Think about the instructions you might provide to an entry-level employee. Or someone very smart but also very new to their job or role. That’s the level of detail or instruction you and I want to use.

ChatGPT Tip #3: Ask Follow-up Questions

You’re going to want to ask follow-up questions. Lots of them.

For example, maybe you realize with your first prompt and ChatGPT’s response, that you didn’t phrase things correctly. Or that you weren’t precise enough in your instructions. Ask ChatGPT for more information. Or to redo its work. Or ask for clarification about some bit of its response.

I’ve found ChatGPT so “human-like” in its response, that I’m inclined to treat it as I would treat a human. But what counts as good manners when interacting with a co-worker or professional? Like not re-asking nearly the same question ten times in a row? That’s not the right approach with something like ChatGPT. Rather with ChatGPT, you or I probably do want to ask numerous follow-up questions all based on slightly different wordings of the facts.

ChatGPT Tip #4: Watch for Errors

ChatGPT makes errors. And it’s hard to spot them because it does such an articulate job when it writes its answers. Also, most of the time? It gives you or me a good answer. I guessed in the earlier blog post ChatGPT gives the right answer maybe 80 percent of the time. And maybe that’s even too low.

But my point is, it makes mistakes. (People call these mistakes hallucinations, by the way. Because ChatGPT presents its answers or responses with seemingly unshakeable confidence.) Thus, you want to be aware of and watch for this.

By the way, often when you spot an error, you can explain to ChatGPT why you believe it made an error. And it will quickly agree. But not always.

This example from the world of tax accounting. So most small businesses can use a Section 199A deduction to avoid paying federal income taxes on the last 20 percent of their business income. However, tax law adjusts the deduction for high income small business owners if they don’t pay enough in wages or if they work in a professional service. ChatGPT probably can’t work with the adjustment formulas. (I’ve tried to get it to do this a bunch. And unless I explicitly provide the detailed steps and calculations, it stumbles again and again.)

This characteristic of ChatGPT to make errors (and of other large language model, or LLM, AIs to make errors) suggests a best practice: For really consequential chats? You and I probably want to stick to topics in which we have pretty deep knowledge.

ChatGPT Tip #5: Curate ChatGPT’s Memory

As you or I work with ChatGPT, it collects memories of business or personal facts that may matter for future discussions. Personal information such as your age, education, ethnicity, cultural background, marital status and net worth. Details about the type of business you operate including its revenues and profitability.

These memories help ChatGPT do a better job at providing you with answers and reports. But you probably want to manage and edit the information ChatGPT collects. Some information may inadvertently be incorrect. Other information may become out of date. And then some other information may be too personal to let ChatGPT use that information to infuse its answers to your questions.

You can do this curation in possibly two ways. First, you can tell ChatGPT to forget details you don’t want it to remember. (“Please ignore the information I provided about expected revenues for next year. That information was wrong.”)

Second, in the past though not currently, ChatGPT has alerted you when its memory is full. I mention this here because the feature might become available in the future. If it does, you can click a button, review its list of memories, and then remove some memories. Watch for this feature if it appears. I think it’s a good way to clean up memories that aren’t correct, up-to-date or accurate.

ChatGPT Tip #6: Use Attachments

ChatGPT lets you attach documents to your prompts. You click the plus button. It displays a dialog box that lets you point to the file. You select the Microsoft Office document, PDF or other file that should be part of the prompt.

Attachments let you provide lots of information to ChatGPT, thereby saving you from typing in a bunch of text. Also, you can include much more data when you use attachments. (ChatGPT does not at the time I’m writing this provide any firm recommendation about how much text you can enter into the text box. But it does suggest you work and it more easily works with attached, formatted documents and spreadsheets than with stuff copied or entered into the prompt box.)

And a tip here: Those JavaScript calculators I’ve been adding to our blog with ChatGPT’s help? Attachments make those possible. What I do is build a small Excel spreadsheet. Verify the spreadsheet formulas correctly make some set of calculations. Then attach the spreadsheet file to a prompt that asks ChatGPT to write JavaScript that collects the needed inputs, makes the same calculations and displays the outputs. I then copy and paste the JavaScript into a blog post.

ChatGPT Tip #7: Proceduralize Use of ChatGPT

I asked ChatGPT whether it had tips about how to begin employing an AI like ChatGPT in a small business.

Its response was lengthy, And I won’t copy and paste it here. But to generalize, it suggested creating standard procedures for using ChatGPT (for example, two-pass reviews and verification of key facts), adding explicit disclaimers to the deliverables when appropriate, recycling results when possible, and standardizing best practices.

All good ideas.

ChatGPT Tip #8: Consider p(doom)

I end with a brief discussion of p(doom), the probability that artificial intelligence creates an existential threat to humanity. I’m going to slightly redefine the term here though and focus on the possibility or probability that AI leads you or me to make some sort of catastrophic business decision or leads us down some absurdly dangerous path in our entrepreneurship or management.

Before I do that, however, let me first disclose my default bias about this sort of stuff. I’m almost always a skeptic. Seriously. To give an example that’s probably old enough to not be polarizing, I did not think there was any chance the Y2K bug would cause the power grid to fail and society to crumble. (I heard that concern from numerous, smart, well-intended friends and colleagues as the 1990s drew to a close.)

Yet I think we need to consider p(doom). Given the hallucinations an AI like ChatGPT regularly produces, given the incredibly polished, hypnotically good answers it provides, and given the supreme confidence it continually displays, we need to be careful it doesn’t send us off a cliff.

A personal example of this: Recently as part of a chat about staffing in the face of talent shortages, private equity firms muscling into the profession and then adjusting billing rates for inflation, ChatGPT recommended a tactical approach for our firm that appeared be a brilliant gamechanger.

Following its plan, we would apparently be able to massively improve our profitability. Two cups of coffee later, I was on-board.

Another cup of coffee, and I stumbled on the tactic’s terrible flaws. Boiled down to its essence, ChatGPT was suggesting we bump our prices by 50 percent more than the prices our able, smart, and highly skilled competitors charge. That tactic then would not have worked, I am pretty sure. Furthermore, the tactic irreversibly deployed very possibly would have caused our CPA firm to implode. Which counts, I think, as a p(doom) threat.

The takeaway then: Do consider p(doom) risk.

The post Small Business ChatGPT Tips and Tricks appeared first on Evergreen Small Business.

Given the questions I get from friends and colleagues about this, especially about using ChatGPT in a small business, I thought it’d make sense to share how I’ve or we’ve been using this new tool.

Organizing This Discussion

Using ChatGPT in a small business though? A big topic. Thus, I’m going to break this discussion into two parts.

In this part, which I consider part 1, I’m going to list and briefly describe all the examples of how we’re probably productively been using ChatGPT in our small business. (The CPA firm in other words.) But I’m hoping you can use my ideas to begin incorporating something like ChatGPT into your work.

In the second part, “Small Business ChatGPT Tips and Tricks,” I share some basic tips and techniques I found work well and get you or me good or better results.

And one other comment as I start: This is going to be a bit of a laundry list. But that’s not just because lists provide an easy structure for writing. I think you and I approach an AI like ChatGPT with the idea that we’re going to build a laundry list of tasks it can help us do better. That, I think, should be our immediate goal.

So, here’s my current laundry list…

General Help with Writing Emails

A quick first task. And this is pretty general. But if you need some help getting your emails “just right?” ChatGPT is your friend. And in a potpourri of ways. Some examples.

If you need to write emails in other than your native language? That’s obviously often a struggle. But here’s what you can do. Write in your native language—and then have ChatGPT translate that message into the appropriate language for the email. This works great.

Another example: If you need to, let me just say this politely, if you need to be a little less angry and a little more composed? Have ChatGPT soften the language of your first draft.

Finally, another example: If you’re struggling with grammar, punctuation, typos or other silly mistakes for whatever reason? Get ChatGPT to proof your writing.

By the way, a possible side effect of this approach? I’m guessing it will over time allow the people to polish their writing skills.

Writing Awkward Emails

A related example: writing those awkward emails that take too much time. Often because the subject matter is potentially hurtful or emotionally charged: declining to interview a job applicant, rejecting a candidate for some position, or disengaging from a client. Also any other communication where you or I may struggle with writer’s block. Or where we may procrastinate as we worry about the wording.

ChatGPT suffers from no emotional block about writing, for example, an awkward email. What it writes? Surely good enough. Always nice enough. Almost surely “legally” safe. And absolutely massively faster at this work than you or I are.

Thus, use ChatGPT to write an adequate email. Then click Send. Done.

The “Quick Question” Emails

You know what I’m talking about here if you’re in a service business. The “I just have a quick question” trap: So, your or my client or customer has a question or set of questions, wants a quick, free answer, and assumes you or I can dash off a quick response. Ideally this afternoon.

Reality: Rarely do these “quick questions” take only a minute or two to draft and then send. It’s a half hour. Or longer.

Thus, I think, if you or I attribute the email to ChatGPT, we have ChatGPT write these. This approach converts a maybe 45-minute task into that five-minute task. One you or I can provide for free.

And two subtle benefits of this approach. First, when you’re sharing bad news or awkward truths, you may find it useful to be quoting something ChatGPT says. (You aren’t the one telling them some idea doesn’t work. ChatGPT tells them.) Second, and maybe unfairly, ChatGPT can be a more authoritative source than you or I are delivering personalized information. (If you want another source? Here’s what ChatGPT says…)

A sidebar comment about all these email-related tasks: I don’t think this stuff is merely nibbling around the edges. CPAs for example basically get paid for half the hours they work. Your business may experience something similar. Thus, if you or I can dial down the minutes we spend here and there communicating with clients and vendors, colleagues and coworkers, we should save hours each week.

Writing Software Code

I want to talk now about some of the new work an AI like ChatGPT can do. And the obvious first example here? Programming. You and I, even if we’re not experienced or trained programmers, can use ChatGPT to write source code. And at extremely low cost.

We can then use this software to automate bits of our businesses. Or to increase the value of the products or services we provide. Or to cut the costs of those products and services.

This should make sense, right? Because you and I have work we do where some software would help… Software that no software development company will ever produce. So, the answer: We do it ourselves.

This step requires a bit of set-up time. It took me about a day to figure out what to do with the JavaScript ChatGPT has been writing for our blog posts recently. Getting Python running on my computer? That took a few hours too. (I had not really programmed for decades.) Roughly speaking, I can now write a blog post that includes a JavaScript calculator in about the same time as a blog post that doesn’t.

This has been a meaningful improvement for us. One example to illustrate. We use our blog to market our niche services across the US. And ChatGPT gives me the ability to bump the value of our blog’s posts by adding JavaScript calculators to some of those posts.

We’ve got “calculators” that estimate the tax savings from an S corporation, that estimate reasonable S corporation shareholder-employee compensation, that calculate the depreciation deductions from cost segregation studies, that answer some of those perennial Roth IRA questions, and a bunch more.

You may be able to do something similar in your operation. Or even something identical.

One-on-one Mentoring and Personalized Education

Another example and in a sense something the programming stuff I just mentioned illustrates. ChatGPT will teach you and me stuff. Complicated stuff.

You can start by having it write a short overview of some subject you in your job or people in your industry struggle with. You can then ask detailed questions. Repeatedly. You can provide examples that explain your current understanding throughout this process using specific client details. (“So let me get this straight, ChatGPT. For my client named Steve, in this situation, it works like this?”) ChatGPT shows endless patience. It works day or night. You can in effect torture it with dumb questions. The sort no one would ever ask in a classroom or seminar.

Seriously, the next time you have a question in the past you’d ask a knowledgeable colleague or mentor? Ask ChatGPT. (I participate as an admin in a couple of online social media networks for CPAs. And most of the questions folks ask? They should probably ask ChatGPT.)

Reasonable-cost Research Reports and Management Consultant Studies

Small businesses often don’t get to do the same sorts of research that larger firms do. Or get to regularly consult with industry or management experts.

For example, the big guys may have economists on staff who look at the likely scenarios the near future holds. They may also either employ or engage with true experts to plan for and think about the challenges and opportunities their business and industry face.

And then what about pursuing or ignoring the strategy or tactic de jour? (In public accounting right now, firms of all sizes wonder whether private equity funds owning a firm makes sense.) The small guys don’t have people (typically) they can ask about stuff like this.

However, now? With ChatGPT? In all of the above cases, you and I can get lengthy written analyses customized to our firm’s specific situation. Concerned about how new tariffs will affect your business or your clients? Or about how inflation may affect you or your clients? Worried about the compensation levels needed to fully staff your firm with great talent? Struggling to understand how something like private equity ownership of firms in your industry impacts your business plan?

ChatGPT will do all this research and analysis for you. And extremely quickly. You can get insights and commentary about the range of economic outcomes from new government policy for your firm this morning as you have your coffee. Actionable insights about current and future salary levels and labor shortages within the profession tomorrow morning–again with your coffee. The private equity thing? Again, with your morning coffee. But maybe two cups for that.

By the way this thought: Will these ChatGPT reports and analysis be perfect? Full of bulletproof analysis? Will the actions they suggest be guaranteed to deliver great or at least good results?

I think not. But getting pretty good research and pretty good analysis surely beats the option of not looking at and considering this stuff. (And I’m not sure what you’d get from an expensive expert is that much better.)

Monte Carlo Simulations and Scenario Planning

A quick thing to point out. You and I can get ChatGPT to do Monte Carlo analysis for our investment planning. And scenario planning for our business plans and forecasts.

I think ChatGPT is particularly useful for doing Monte Carlo simulations. To start, get ChatGPT to explain what a Monte Carlo is and how it works. You can then get its help to collect the handful of inputs needed. And you can then ask it to make the calculations. And then ask it redo the calculations for an alternative set of assumptions.

The same reality occurs with scenario planning. Say you were thinking about selling out to a private equity firm. You can easily get ChatGPT to model the financial outcomes of continuing to operate independently, selling out to a private equity, and any other option too.

For what it’s worth? When I asked ChatGPT to analyze for fun our firm selling out to a private equity firm, it estimated we would simply be converting ordinary income to capital gains and would probably, even if CPA firm valuations deflated, end up with much better outcomes by staying “partner owned.” That analysis also acknowledged but didn’t quantify the benefits of autonomy by working for ourselves versus (and here I quote ChatGPT) working for “MBAs with spreadsheets.” I intuitively knew in our situation all this was true. But I found it interesting and useful to get another, neutral, objective point of view.

Critiquing Business Strategies and Tactics

Okay, a subtle point but an important one. I don’t feel like a ChatGPT-style AI does a good job at business planning, strategy, or tactics. For one thing, it “thinks” or “does what it does” too linearly. For another thing, probably you and I can’t prompt it with enough of the right information to come out with innovative, highly personalized strategies and tactics.

But you know what ChatGPT is really good at? Looking at some plan, strategy or tactic that you or I or a consultant or client develops and then critiquing it. There? It often will spot errors or bugs or holes.

Sorry for falling down the rabbit hole for a paragraph. (Just this paragraph.) And I’m not sure about exact error rate percentages here. But here’s what I think happens when you have ChatGPT “check your work.” If when we’re on our game our error rate is five percent and ChatGPT’s error rate is twenty percent? (And those percentages feel about right actually.) A compounding benefit occurs. And the overall effective error rate drops to maybe one percent. (The actual math maybe looks like this: 20% times 5% equals 1%.)

Three Final Thoughts

Let me close with three final thoughts.

First, I don’t think something like ChatGPT replaces a good knowledge worker any more than a nail gun and air compressor replace a master carpenter. After more than a year, though, I do think you and I will use ChatGPT for work we can’t affordably or efficiently do now. For a reasonable price.

Tip: To put this into dollars? I think we pay OpenAI $20 a month per person right now for a subscription to ChatGPT 4o. Paying $200 a month per person for ChatGPT o1? Yeah, that’s probably okay. But at some point, say the price was $2,000 a month per person, I don’t know if that would make economic sense. At least not given how we’re able to use the technology.

Second thought: I feel like ChatGPT amplifies worker productivity and performance. You boost someone’s performance by maybe—this is a fermi number guess—by maybe 20 to 30 percent. That means a couple of things, I suggest. First, you and I don’t become less valuable with AI we become more valuable. (For $20 a month, you or I maybe become like 20 percent smarter.) Second, the most important people to get up to speed with an AI tool like ChatGPT? Your most skilled and experienced team members.

Here’s my third and final thought. An AI like ChatGPT should allow you or me to dramatically boost the performance of our small businesses rather quickly. So not at some point in the future like three years from now. But today. Or maybe tomorrow. The trick though? And this gets back to the laundry list comment I made earlier. We need to experiment and explore and ultimately build a list of tasks where ChatGPT lets us do more work and new useful work.

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