Maine is heating up (in so many ways)

Growing up in Maine, I don’t recall having much appreciation for our state. Sure, I spent a lot of time outside like all kids did back then, but I never paid attention to our state’s natural physical beauty. I didn’t count myself lucky for living in a virtually crime-free community or being able to wander with friends without my parents having to worry about drugs, gun violence or abduction. It’s not to say that Maine never experienced any of these issues, but they were comparatively rare to other states.

My focus was on getting out. My generation was just another in a long line of those whose members couldn’t wait to get out and see the “real world”. News stories spoke of the “brain drain” and how Maine companies were struggling to find younger employees. Population growth was stagnant or anemic at best. By the I graduated high school in 1991, Maine had essentially become a tourist destination and decent place to retire, but not one where you’d move to looking for economic opportunity. For me, Maine was a great place to be from as everyone loves Maine (except for New Hampshire, and they are clearly just jealous), but not a place to be. Well, how things change…………………………

Beginning in 2013, Maine has seen a net positive in migration percentage (% of people moving here over % leaving) and that has steadily increased over the last several years. However, in 2021 Maine led the nation in in-migration %![1] You read that correctly, ahead of states known for growth, such as North Carolina, Texas, Utah and Florida.

While it is easy to point to COVID as a main reason for the influx, other key indicators seem to suggest a more permanent shift here. Home sales, although recently slowing have remained strong; the state’s larger employers continue to advertise and fill jobs and in sales tax collection, where Maine led the entire Northeast in percentage increase between 2020-2022[2].

With all this good news, however, we still have our challenges: Economic and career opportunities continue to lag behind national rates. With few large employers and with high-speed internet still not available throughout the state, Maine can be a challenging place to start or further a career. While more people are working remotely than ever before, many folks can simply bring their jobs with them, although that isn’t always a possibility for both members of partnership.

Another concern is Maine’s old housing stock. With many homes more than 100 years old and woefully inefficient to heat, new residents moving from more temperate climates are shocked by high heating bills and our reliance on #2 heating oil, the price of which has increased considerably over the last year. Charming capes and former sea captain’s homes are idyllic but not ideal as Maine’s winters are still no joke.

Nevertheless, we know that with challenge and change also comes opportunity. Here’s one to consider.

As a business advisor, I speak with people nearly every day who have moved or intend to move to our great state. It is rare that at some point in the conversation, they don’t mention that cost of heating their home. Certainly, the incentives available for energy efficiency, insulation, heat pumps and other solutions help, but savvy homeowners are also investing in energy efficient alternatives to heating oil systems for their homes as well. For many Mainers, wood heat has been not only a creature comfort but a vital solution to staying warm during winter. As wood stoves have become more efficient, demand for them has also increased steadily. Simply put, if you plan to live in Maine and endure the cold winters and sporadic power outages, you’re gonna need a woodstove.

When our clients, owners of a retail stove, fireplace and insert store, approached us last fall about selling their business, their situation was not altogether different from so many others. They had spent the better part of 20 years building a company through hard work, fair prices and excellent customer service. Those long days resulted in a profitable business enabling them to more than adequately provide for their family and employ several folks in the local community. They planned, they saved and above all, they worked. Inevitably, they reached the point where retirement was the next phase and time had come to put a plan in motion. What set them apart was just how incredibly the business was performing. Too often, we are contacted by those who have let their business slide; revenues are flat or declining, employees have left and not been replaced and customers going elsewhere. It is difficult to interest buyers when the current owners have not been showing interest of their own. Not the case here.

By contrast, they had seen demand for their products increase considerably. The combination of organic demand fueled by consumers looking to invest in cost-saving measures, resulted in growing revenues and profits. Their multi-store operation and great reputation made them the preferred choice for homeowners around the state. Customers loved the friendly and knowledgeable staff and the location(s) were super convenient.

The business is poised for another consecutive record-breaking year, but it is time for new ownership. As the owners told me recently, as much as they’ve enjoyed their time as business owners, they also want to travel, enjoy grandkids and just slow down. Their change is now someone else’s opportunity.

2021 Revenues increased nearly 25% from the year before and the business recorded Discretionary Earnings of over $350,000, up 42% from last year. It is fully staffed by long-tenured professionals, and owns its flagship location with a second location enjoying a long-term lease. The inventory is healthy with no supply chain issues. The owners are also willing to owner-finance a portion of the sale.

Imagine owning a successful business in a key industry in the fastest growing state in the country? Well, you don’t have to imagine it. This opportunity could be yours. Call us today and don’t forget to break out those long johns soon.

Justin Cotta Holmes, Owner – Maine Business Advisors LLC

Maine Business Advisors is a full-service business brokerage and commercial real estate firm. We assist both buyer and sellers with all aspects of a business purchase transaction, including the obtaining of SBA financing. For more information on this and other business opportunities, please call our office at 207.835.4770 or email at jholmes@tworld.com

---

[1] https://www.atlasvanlines.com/resources/migration-patterns

[2] https://www.census.gov/library/visualizations/interactive/monthly-comparisons-for-state-sales-tax-collections.html