Before signing an AI contract, validate the service against a real workflow. A polished demo can hide missing controls, extra integration costs or contract terms that do not fit your business. Use these ten questions to structure vendor due diligence for a small or mid-sized business operating in the US, UK or Europe.
Data and security
- What data is stored, where is it processed and how long is it retained?
- Is customer or employee input used to train or improve the provider’s models?
- Which security certifications, access controls and incident processes apply to the exact product tier?
- Can the company meet your location, privacy and sector requirements?
Workflow and quality
- What are the tool’s known limitations for your specific task?
- How will a human review output before it affects a customer, payment or important decision?
- Can staff export logs, track changes and escalate a suspected error?
Commercial terms and continuity
- What does pricing include, and how does it change with usage or extra features?
- What support, uptime commitments and response times are included?
- How can you export your data and stop service without losing business records?
Ask the vendor to answer in writing, identify documentation for each commitment and show how the feature behaves in a test account. If a provider cannot explain its data handling or exit process, pause before uploading live information.
Pilot acceptance rule
Proceed only when the business owner, security or privacy reviewer and process operator agree on scope, approved data, a quality baseline, human checks, full cost and a stop condition.
Compare vendors fairly
Give each supplier the same use case, sample data and success criteria. Include licence, setup, integration, training, staff review and support costs. Test unusual and poor-quality inputs, not just ideal examples. Record defects and remediation time. A tool that is slightly less impressive in a demo may be easier to govern and support.
Contracts and laws differ across US states, the UK and EU member states. Have qualified legal, privacy or security specialists review high-impact or regulated use. This checklist supports procurement; it does not replace professional advice.
Frequently asked questions
What should I ask an AI vendor first?
Start with how the product handles your data: where it is processed, who can access it, how long it is retained and whether it is used for model training. Then test the tool on a real, approved workflow.
Should a small business sign an annual AI contract?
Consider a limited pilot first if the vendor offers suitable terms. Confirm cancellation, usage limits, support and data export before committing to a longer term.
How do I compare AI vendors?
Give each provider the same workflow, data assumptions and measures. Compare quality, controls, integrations, total cost, support and exit options—not feature counts alone.
General procurement guidance for SMEs; seek specialist advice when regulated or sensitive data is involved.