PRESQUE ISLE, Maine – Handing over the keys to a decades-old family business must be difficult.
In a state where 80 percent of businesses are family-owned, that’s a lot of heritage to preserve. But when there is no one left to take over, many businesses must either sell or close.
It’s happened to Maine’s biggest companies. In 2015, LL Bean named Stephen Smith its first CEO, who was neither family nor someone who had been there for years. Dead River and Getchell Brothers Ice were sold to out-of-state interests in December.
Legacy businesses have survived various economic ups and downs and are now struggling to bounce back from a worldwide pandemic. A nationwide labor shortage has some looking to lure foreign workers or seek government assistance. But for two Presque Isle business owners, the key is trying to keep what local families spent decades building afloat.
Having an exit strategy is important, but only 13 percent of family businesses have one, according to the Family Business Institute, a Maine nonprofit. The chance that a business will pass from the second generation to the third is only 13 percent.
When Alden and Pat Rathbun were ready to retire in 2016, no family members were there to take over the 70-year-old Rathbun Lumber, which Alden’s father founded. Then-manager Jamie McLaughlin didn’t want to close the store where he had worked for 16 years, so he bought it.
In December, a few months after second-generation owner Lionel Theriault died, his family decided to sell Theriault Equipment. The John Deere dealer had been in business for 63 years and also owned Harvest Equipment in Vermont. Buyer: United Ag & Turf Northeast, led by a former Harvest owner.
“I can see all the fear that comes with the sales process. People tell me about the concrete floor they poured in the 1940s,” said Scott Miller, president of United Ag & Turf Northeast.
Miller has helped oversee the acquisitions of 17 appliance dealers from New York to Maine — and has dealt with the emotions that accompany each family’s decision to sell.
It’s hard for family members to walk into a place that was once theirs and know it’s different, he said. And when families want out or can’t afford to move on, they face letting their legacy die.
“That’s really what we’re trying to prevent, if businesses are dying,” Miller said. “[It’s] succession planning. As the owners look to retire or sell, how does this business stay open and serve the community?”
Miller has spent a lot of time on Presque Isle, which he called the heart of Aroostook County. He started sweeping floors at a John Deere dealership in Vermont and later started Harvest Equipment with his business partner. By 2012, they decided to sell and enjoyed a solid relationship with the Theriault firm.
The deal has now come full circle. More than anything, Miller’s company wants to keep business as usual and keep all the employees who aren’t ready to retire.
Because he’s been on both ends of the spectrum, he knows the struggles. And however it is handled, the transition from one owner to another is difficult.
“We do our best to ensure this [things are] well communicated, but change is change and that’s the hard part we have to recognize,” Miller said.
Like Miller, McLaughlin was familiar with the company he took over because he had worked there for so many years, three of them as a manager. So when the Rathbuns talked about retirement, he had a plan.
“I didn’t want to see him go. They were of retirement age and wanted to sell. It was right time, right place, really,” McLaughlin said.
The family was happy to know who the buyer was. And because he knew the business and the community knew him, there weren’t many obstacles to a successful transition.
One of the first things he undertook was to remodel the store and increase the product lines to keep pace with what customers wanted.
But since COVID-19, the real challenges have been rising material costs, supply chain delays and – more than anything – finding enough people to work. Rathbun has lost some longtime employees to retirement, but that was expected, McLaughlin said.
Now, he just wants to keep a full staff of seven.
“We sold ourselves with service. We’re the little guy, so you win,” he said. “It’s been a big challenge with the lack of help, but we’re all in the same boat.”