Highlands Log Structures

Pamela and Winston Johnson were referred by Christianne Parker, the Assistant County Administrator for Economic Development, Washington County, in 2001 for assistance in applying for financing to relocate Highlands Log Structures to a permanent location in the William Cole Industrial Park near Abingdon, Virginia. They needed to acquire additional land and material handling equipment for their expanding handcrafted log home business. The Virginia Highlands SBDC provided business planning and financial projection expertise to acquire $188,000 in financing from the Mount Rogers Planning District Commission and BB&T. These funds were used to purchase four acres in the industrial park and a 28-ton mobile crane. The property purchased allowed efficient raw log storage, log processing, and log-shell assembly areas.

The business continued to grow until 2007. A log showcase building was constructed on-site and employment grew from the original nine to over twenty-five (25) skilled crafters engaged in the initial construction and on-site re-assembly of the log shells on the owner’s site. Over 250 structures were assembled on sites in Virginia, West Virginia, Tennessee, Kentucky, North Carolina, Pennsylvania, and New York.

In September 2007, plans were developed for another major expansion of property and equipment. An additional six acres of land was purchased in the industrial park. A business plan to finance the construction of additional facilities and the addition of log-home related products was developed. With the downturn of the economy in 2008, these plans were not implemented and strategic plans were developed to ensure the company’s survival.

The plan included the sale of all non-critical equipment and the reduction of the labor force to seven critical skilled employees. The owners and employees took major pay cuts and, with the assistance of TruPoint Bank, a company debt of $500,000 was refinanced, allowing the business to continue to positively cash flow.

The marketing strategy was changed to fully utilize the workforce. All new structures sold were provided on a turn-key basis, rather than just assembling the log shells. A major marketing shift to promote the fabrication and installation of expansions and repairs was successfully implemented. These major changes in the business plan have enabled Highlands Log Structures to survive the downturn.

The customer base has changed from being real estate developer centered, to individual primary homes. Over 75% of log home manufacturers did not survive the 2008 downturn in home real estate development and construction. However, through the revised market strategy, strategic financing and cost reduction measures, Highland Log Structures positioned itself to remain profitable and to take advantage of business opportunities as the economy changes. The Virginia Highlands SBDC continues to be a resource for business advice and assistance to this long-term client.