Business Advice – What We Can Learn From Amish Success

According to the SBA, new businesses have a five-year success rate of just 50%.

Compare this with Amish businesses, which have a remarkable 95% success rate. In other words, their history of success is almost double the rate of the rest of the country.

I’m just fascinated by that statistic!

What’s their secret? What are they doing that the rest of America isn’t? Here are things about them that we can learn from, which I learned from Amish Enterprise: From Plows to Profits.

Work Hard

Yeah, we’ve all heard this before. But Amish business owners regularly work 50-60 hour workweeks. One furniture maker noted, “If I worked from nine to four and then watched TV the rest of the evening, I wouldn’t make it.”

But work ethic alone doesn’t create their success. They derive a deep sense of meaning from their work that is distinct from most of America. To them, work is a spiritual activity, and essentially a way of life. Work defines the use of their time, not vice versa.

At the same time, they don’t overdo it. Work is kept in its proper perspective by observing a sacred day of rest. Sundays are spent attending church and visiting friends.

Get Lots Of Experience

Growing up on a farm has been a great resource for the Amish to develop business skills. There, they manage inventories of animals, equipment, and engage in the commodity markets of milk and seed.

Through these responsibilities, they develop self-reliance and problem-solving skills. As one farmer put it, “On a farm you have to be a mechanic, an accountant, and a vet. You’ve got to do it all.”

Though the Amish stop formal schooling after the eighth grade, this hasn’t hindered their business success. Ironically, it’s been a strength. After schooling, the Amish learn on the job and work gradually into business. In this way, they have a head start on the rest of the country. Early apprenticeship is the optimal form of business training.

Keep Costs Down

Amish businesses have remarkably low overhead. Since they value modesty and frugality, business offices are unadorned and store signs are hand-lettered to cut costs.

Owners don’t have enormous expense accounts to attend costly conventions, nor do they sport high-priced clothing. Offices don’t have posh chairs and ornate furniture to drain their profits.

And few businesses hire full-time clerical help. Most Amish owners multitask by managing their own books part-time.

With schooling ending after the eighth grade, they can subtract the costs of college. And by living the simple life, expensive vacations and other modern “necessities” also aren’t a part of their budget. Instead, they focus on a family-centered, slower-paced life that costs less.

Look For Help, And Be Of Help

Amish business owners both give help and get help. With the few businesses that do struggle, assistance from the community is available to guide the struggling business back to profitability. Families spring into action to provide capital, mentoring, and labor.

Successful business owners are happy to give back by extending low-interest loans to beginning entrepreneurs. “I’ve had enough help in my years getting started that I like helping other people with what they’re doing,” said one manufacturer.

This spirit of mutual aid increases the likelihood of success and lessens the chances of failure.

Start Small, But Take Action

Amish business owners usually start on small budgets, using personal savings and limited debt. Their keys to stable growth are slow expansion and demanding work. They dismiss get-rich-quick schemes and shortcuts to success.

History in farming taught them to invest time and energy upfront, and then to wait for the harvest.

After deciding to start, they enter the marketplace with little more than a willingness to learn. Rather than pursuing an MBA, they consult with experienced family, neighbors, and other Amish business owners.

In regards to starting a business, a grandfather counseled, “Don’t talk about it, just start right in and get to work.”

Be Resourceful

Restrictions on the use of technology may seem like another hindrance to success. But this has forced the Amish to develop ingenuity, turning this weakness into an opportunity.

One Amish farmer saw such an opportunity with a waterwheel that produced erratic power because of uneven speeds. He built an improved model using aluminum paddle blades and a driveshaft with universal joints. The new wheel uses less water and provides more power.

No Politics At Work

With small Amish businesses, there’s little hierarchy. Distinctions between labor and management are few.

A machinery manufacturer will spend his days painting finished pieces and doing quality control alongside his employees. Working together this way builds camaraderie and enhances communication. Negative vibes that often permeate labor-management relations are minimal in Amish businesses.

Why do you think the Amish are so successful in business? Are there any things you can take away from the Amish and incorporate into your business or life?

This post was included in the June 13, 2010 edition of the Corporate Vigilance blog carnival and the July 24, 2010 edition of the Christian Finance Blog Carnival at ChristianPF.