PRESQUE ISLE, Maine – Handing over the keys to a decades-old family business must be difficult.
In a state where 80% of businesses are family owned, that’s a lot of legacy to preserve. But when there is no one left to take over, many establishments have to sell or close.
It’s happened in the biggest companies in Maine. In 2015, LL Bean appointed 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 companies have survived various economic ups and downs and are now battling a global pandemic. Due to the statewide shortage of employees, some are looking to attract foreign workers or seek government assistance. But for two Près Isle business owners, the key is trying to keep afloat what local families have taken decades to build.
Having an exit strategy is important, but only 13% of family businesses have one, according to the Institute for Family-Owned Business, a Maine nonprofit. The probability of a company moving from the second to the third generation is only 13%.
When Alden and Pat Rathbun were ready to retire in 2016, no family members were around to take over 70-year-old Rathbun Lumber, which Alden’s father founded. Then-manager Jamie McLaughlin had no desire to close the store he had worked at for 16 years, so he bought it.
In December, a few months after the death of second-generation owner Lionel Thériault, his family decided to sell Équipement Thériault. The John Deere dealership had been in business for 63 years and also owned Harvest Equipment in Vermont. The buyer: United Ag & Turf Northeast, run by a former Harvest owner.
“I can see all the trepidation that comes with the selling process. People tell me about the concrete floor they poured in the 1940s,” said Scott Miller, president of United Ag & Turf Northeast.
Miller helped oversee purchases for 17 equipment dealers from New York to Maine — and managed the emotions that come with 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 risk letting their legacies die.
“That’s really what we’re trying to prevent is businesses dying,” Miller said. “[It’s] succession planning. As owners look to retire or sell, how does this business stay open and serve the community? »
Miller spent a lot of time at Près Isle, which he called the heart of Aroostook County. He started by sweeping floors at a John Deere dealership in Vermont, then launched Harvest Equipment with his business partner. In 2012, they decided to sell and maintained a solid relationship with the firm Theriault.
The deal has now come full circle. More than anything, Miller’s company wants business to continue as usual and retain any employees who are not ready to retire.
Because he’s been on both ends of the spectrum, he knows the struggles. And no matter how it’s handled, the transition from one owner to another is difficult.
“We do our best to ensure that [things are] well communicated, but change is change and that’s the hardest part we have to recognize,” Miller said.
Like Miller, McLaughlin knew the company he took over well because he had worked there for so many years, three of them as a director. So when the Rathbuns talked about retiring, he had a plan.
“I didn’t want to see him disappear. They were at retirement age and wanted to sell. It really was the right time, in the right place,” 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 barriers to a successful transition.
One of the first things he undertook was to remodel the store and increase product lines to keep pace with what customers were looking for.
But since COVID-19, the real challenges have been rising material costs, supply chain delays and, most of all, finding enough people to work. Rathbun lost longtime employees to retirement, but that was expected, McLaughlin said.
Now he just wants to keep a full complement of seven.
“We sold ourselves on the service. We’re the little guy, so that’s how you win,” he said. “It’s been a huge challenge with the lack of help, but we’re all in this together.”
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