PRESQUE ISLE, Maine — Handing over the keys to a decades-old family business has to be tough.
In a state where 80 percent of businesses are family-owned, that’s a lot of legacy to preserve. But when there’s no one left to take over, many establishments must either sell or shutter.
It’s happened at Maine’s biggest companies. In 2015, L.L. Bean named Stephen Smith its first CEO who wasn’t either family or someone who’d 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 now are battling back from a worldwide pandemic. Statewide employee shortages have some looking to lure foreign workers or seeking government help. But for two Presque Isle business owners, the key is trying to keep afloat what local families spent decades building.
Having an exit strategy is important, but only 13 percent of family businesses have one, according to the Institute for Family-Owned Business, a Maine nonprofit organization. The chance a business will pass from the second to third generation is only 13 percent.
When Alden and Pat Rathbun were ready to retire in 2016, no family members were there 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’d worked in for 16 years, so he bought it.
In December, 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. The buyer: United Ag & Turf Northeast, led by a former Harvest owner.
“I can see all the trepidation that comes through with the selling process. People tell me about the concrete floor they poured back in the 1940s,” said Scott Miller, president of United Ag & Turf Northeast.
Miller has helped oversee the purchases of 17 equipment 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 their own and know that it’s different, he said. And when families want out or can’t afford to keep going, they face letting their legacy die.
“That’s really what we’re trying to prevent, is businesses dying,” Miller said. “[It’s] succession planning. As owners are looking to retire or sell, how does this business stay open and serve the community?”
Miller has spent a lot of time in Presque Isle, which he called the heart of Aroostook County. He started out 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 business to continue as usual and retain all the employees who aren’t 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 the next is difficult.
“We do our best to make sure that [things are] communicated well, 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 so many years, three of those as manager. So when the Rathbuns talked about retiring, he had a plan.
“I didn’t want to see it go away. They were at retirement age and wanted to sell. It was a right time, right place thing, 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 roadblocks to a successful transition.
One of the first things he undertook was remodeling the store and increasing product lines to keep pace with what customers were seeking.
But since COVID-19, the real challenges have been the increased costs of materials, 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 on service. We’re the small guy, so that’s how you win,” he said. “That’s been a huge challenge with the lack of help, but we’re all in the same boat.”
