Taking care of business and people have gone hand-in-hand at Rathburn Tool since 1983
Statistically speaking, entrepreneurs fight a losing battle from the beginning. According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail within their first two years, 45% within their first five years, and 65% during the first 10 years with only 25% of businesses making it to 15 years or more.
So what makes the difference in companies that succeed past 15 years? For Jerry Rathburn, founder of Rathburn Tool & Manufacturing, it’s a combination of grit and determination, making quality products that solve customer challenges, and having good, trusted advisors around you.
“Whatever you’re making needs to solve a problem,” Jerry said. “And you need some people you can trust, talk business and trade ideas with—and who will be open and honest.”
Jerry mentioned a banker friend and consultant who was critical to his early success. “I knew I could trust him and the advice he gave me,” Jerry added. “He was the chairman of the bank and I would show up in blue jeans and tattered shoes and we would discuss business. He came from a different world than I did which helped balance the perspective. I knew things he didn’t, and he knew things I didn’t. We trusted each other and he helped guide my business decisions.”
Jerry was adamant about one other key factor for long-term success: delayed gratification. “That’s the best advice you can give anyone starting a business,” he said. “Some people taste a little success and go and spend money they can’t afford to lose.”
“When I started Rathburn Tool in 1983, we were small and scrappy. We put every dollar we had back into our equipment and our people,” Jerry continued. “I never even envisioned having an air-conditioned office. When we did get a new office we went for six to eight years before we added carpet. Because it wasn’t necessary.”
What was necessary was looking out for his employees. “I understood very early that people were a really important asset of this company. When we started making some money, we added benefits that would help take care of our employees and their families. We did as much as we could.”
He continued, “Eventually we were able to add retirement plans to our benefit package. This was important to me because this can change people’s lives and the lives of their families after they stop working for us.”
But Jerry wasn’t looking for the easy way of offering benefits. He wanted to do it the right way. “Back in the 1980s and early 1990s a lot of companies had retirement plans that depended on the stability and profitability of the company,” he noted. “People might have $80,000 in their retirement plan and think they were safe only to lose it all when the company went bankrupt.”
“It took me almost five years to find a program outside of our company that would protect the funds for our people, regardless of whether Rathburn succeeded or not. That way, if our company went bankrupt, our employees still had their money.”
Jerry also used his business success to look out for his community. “I’ve always taught my daughters to look out for those around them and do a lot less judging than the world likes to talk about.”
For the Rathburn family, that has meant hosting annual programs for under-resourced kids and families including events like cookouts and hayrides for handicapped children at the family farm. It has also meant supporting individuals and families with food, clothing, and even job opportunities.
“We’ve had a number of employees find their place at Rathburn after facing some hard life challenges,” Jerry said. “Some have been in prison, some homeless. Sometimes what it takes is someone else offering a helping hand, a way up and out. Not everyone will take advantage of those opportunities the way they could—but some will. And that’s what’s important. To help them succeed is what life’s about!”
Business books and business writers often talk about the tips and tricks one could use to build a successful company. Many of those tips and tricks can sound like the flavor of the month, leveraging social media and influencers, borrowing money to go big. But the lessons Jerry Rathburn has learned and applied over more than 40 years in business have built a company that not only provided a stable base for his family, it has formed the foundation for significant change and positive growth in the community around him.
Follow this series to learn more about Rathburn’s origin story, lessons in leadership, evolutions in equipment, and the importance of treating people well.