Who is likely to be a more successful entrepreneur – a Harvard Business School graduate or an Amish man who quit school in eighth grade? According to new research, the answer may surprise you.
Amish scholar Don Kraybill says the failure rate of Amish start-ups is less than 10%, while the failure rate for non-Amish businesses is 65%. Although it is tempting to say that their businesses target different consumers, the reality is that Amish businesses are competitive with mainstream businesses, with many Amish even offering online ordering and shipping.
Kraybill has examined the conditions for businesses in predominantly-Amish Lancaster County. He concludes that over the last decade, the Amish world has undergone a kind of mini-Industrial Revolution. A significant increase in population, combined with the high cost of land for farming, have forced traditional Amish to increasingly turn to trades and small businesses to make a living. There are now more than 2,000 small businesses in the Lancaster County area. Fewer than one-third of Amish households rely on farming as its primary source of income.
In a talk to area entrepreneurs, Kraybill identified a dozen factors that contribute to Amish success. Although some are peculiar to certain aspects of Amish society, many could help non-Amish entrepreneurs have a greater chance of building a lasting business.
So what makes Amish businesses stand out?
One key factor is the concept of apprenticeship. As mainstream American society has phased out apprenticeship in favor of sending most everyone to college, the Amish have retained strong apprentice systems. Children grow up working alongside their parents and neighbors, and many are able to repair a hydraulic lift or sew a complicated quilt by their early teens, for example. Learning on the job next to experts in a field would significantly impact non-Amish communities for the better, especially where students cannot afford to attend college.
Another important factor is that the best and brightest Amish have nowhere to turn but to entrepreneurship. In American society, the smartest teens and young adults are often funneled into law, medicine and other careers requiring years of study. Amish do not normally graduate high school, which means their best and brightest focus on business. Obviously society needs highly-educated people in some professions. However, parents should try not to drive their children toward professions that they believe are prestigious rather than encouraging them to be self-starting entrepreneurs.
The Amish are renowned for their work ethic, rising before dawn and putting in many hours after 5:00 pm. Work ethic has been somewhat watered down by American society, with many preferring their children and teens spend time on their studies and extracurricular activities like play. What the Amish and immigrant communities reveal, however, is that mainstream Americans might be forgetting to teach the next generation the value of hard work.
Low overhead is another way that Amish build businesses to have lasting success. Rather than investing in expensive technology, air conditioning, furniture and remodeling, the Amish focus on business first. Many first-time entrepreneurs put themselves in debt right away because they think they need fancy office gear. Keeping that overhead down is a huge help in making it through that first difficult year.
A preference for smallness over “bigness” predominates in Amish communities. Amish entrepreneurs are not thinking about getting rich quick, franchising, or quickly expanding the business. Instead owners remain personally focused and invested on the business, with little social distance between owner and customer. If mainstream entrepreneurs adopted this spirit, they would also obtain invaluable feedback that would enable them to make their business stronger and more profitable.