Business Lessons from the Amish

Posted by on June 15, 2010 in Business Management, Business News [ 0 Comments ]

During these trying times, it is helpful to find a business model that works.  One would think that you might need to analyze the giants of Silicon Valley or Wall Street, but it is actually the businesses of the Amish that we should be analyzing.

The Amish have run successful businesses for many years, with a 95% success rate at staying open for at least five years.  This is compared to a 50% rate for the average new U.S. business.  A 2009 report by Elizabethtown College studied several Amish settlements and found failure rates ranging from 2.6% and 4.2% and closure rates south of 10%.

The Amish secrets can be of great help to anyone starting a new business, or anyone in an existing business.  But what is it that makes an Amish business so successful?

Amish Culture –  The Amish culture emphasizes qualities such as hard work and cooperation.  These qualities are the backbone of a successful business.

Stick to What You Know – The Amish also tend to stick to what they know, which can help to create a good reputation.  They are known for all things ‘traditional’ and ‘rustic.’  You would not see an Amish person selling cars for a living.  They tend to develop specialized products for niche markets.  This specialized way of doing business allows them to focus on a particular market segment and establish a quality brand.

Amish Values – The Amish have a strong faith in God and their community.  They are also very frugal, which helps them to retain their businesses.  The Amish are also extremely humble and don’t boast about their achievements.

Small Scale Operations – They tend to manage smaller scale operations with superior products.  An example of this is the high quality 100% wood furniture the Amish are known for crafting with impeccable attention to detail.  Each piece of wood is hand- selected to match the specific furniture in mind. The Amish woodworkers pride themselves in their work and view their products as pieces of art.

Relationships are Everything – Amish build lasting relationships with their customers which keep them coming back.  They have relationships with their family, community, as well as their customers.  The Amish are truly in it for the people, not just money which gives them a very natural authenticity—and profits to follow.  Relationship building is a key marketing tool for the Amish.  Following up with customers gets them noticed.  In Erik Wesner’s book Success Made Simple: An Inside Look at why Amish Businesses Thrive, he took note of the Amish idea that the customer is always right – even when he is wrong.  But only to a point.  He stops being right when you have to compromise your integrity or sacrifice your resources beyond a predetermined acceptable level.

Why not take a few lessons from the Amish when establishing your business.  The Amish are not just making brooms or buckets, says Kraybill.  “Many of these Amish firms are sizable operations with annual sales over several million dollars.”  The Amish are great entrepreneurs and their value system and lifestyle choices help them succeed in their businesses.  The lessons from the Amish way of doing business are simple, but often overlooked among entrepreneurs.  In light of the recent economic meltdown, the back to basics strategies of the Amish are truly enlightening and could be of help when building a business.

Jessica Gombes is a writer at Resource Nation.  She writes extensively about  purchasing and outsourcing decisions for small business owners and entrepreneurs.

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