Angels offered him protection

At the same time, costs are rising on many fronts. The impact of a downturn will be felt most keenly by housebuilders and those in the relevant supply chain.

However, the experience of the subject of this week's SME Focus, John Merry, may encourage hopes that firms with exposure to the Scottish housing market may escape the worst of any slowdown.

Commentators believe the fact Scotland has not seen house prices soar to the heights seen in other regions like south-east England means it should be spared on the way down. The timber-frame specialist that Merry runs is going great guns, 10 years after banks declined to back the rescue of the venture from the ashes of another business, leaving business angels to take up the baton.

The lesson may not be lost on anyone who is finding it hard to persuade banks to cough up as the credit crunch rumbles on.

Name: John Merry.

Age: 60.

What is your business called? Oregon Timber Frame.

Where is your business based? Oregon's headquarters and main manufacturing facility are in Selkirk and we are opening a second manufacturing base in the English Midlands this spring.

What services does it offer? Oregon supplies engineered structural timber frames - wall, floor and roof elements - to the volume house building industry. Our company's aim is to encourage housebuilders to specify sustainable and environmentally friendly-construction, and to increase quality, efficiency and site safety by using off-site construction.

That sounds a bit scripted, doesn't it? But it's actually what we believe in and what we do.

What is its turnover? What's that phrase? Turnover is for vanity, profit is for sanity!' Nonetheless, for the record, our turnover last year was £20m and we're expecting turnover of £24m in 2008. We've had an amazing start to this year with a record order book already, which shows that our market is holding up strongly despite the reported economic slowdown.

When was it formed? Oregon was formed in 1998, so it's our 10th birthday this year. It's been quite a 10 years, too. We were formed as the result of a management buy-out of a company which went into receivership. They did a bit of everything - housebuilding, timber frame, social housing, self-build, etcetera. One of the key things we did was focus the company on the successful timber frame manufacturing side, specifically the supply of structural frames to volume housebuilders.

Despite the fact that we had an experienced team in place and timber frame was an established construction method - supplying 50%-plus of the Scottish new-build market, with a large, under-exploited English market to tap - the high street banks turned us down. They wouldn't advance us the funds because "construction was a high-risk business". What ever happened to high risk, high return I wonder?

Over Christmas 1997-98, I read an article about business angel funding and, in the new year, we approached an Edinburgh-based group of investors called Archangel Informal Investment. Individuals within the group recognised our potential and decided to invest - and Oregon was launched in February 1998.

We also found Rod Lawson, our current chairman and finance director, through Archangels. He came on as finance director and our board still includes those initial investors, who have stayed with us throughout.

We also had great support from our existing customers and suppliers. We got great lines of credit for our timber from suppliers and our customers paid their bills quickly - all of which helped our cash flow tremendously. It was an amazing and exciting time.

What were you doing before you took the plunge? I've been in house- building all my working life. I qualified as a quantity surveyor and worked for George Wimpey Group for the majority of the time before joining the Oregon Development Company, which went into receivership in 1997.

Why did you take the plunge? Well, I'd worked for plcs, under the umbrella of large companies with all that that implies: it was time for a new challenge and I had the chance to do something different. Another key factor was that there was a good existing team in place, who worked really well together. Key members are still with us today.

What was your biggest break? Our first order from a national housebuilder. That was in spring 1999, just after we launched, which was fantastic. Good performance, repeat orders and word-of-mouth did the rest.

What was your worst moment? None really, since we set up the company. Before that, when the banks turned us down, I suppose. The best part has been guiding the company to sales in excess of £100m in the 10 years.

What do you enjoy about running the business? I get a real kick from seeing an empty site and within days it's occupied with housing units and within weeks they are occupied with people needing and wanting modern homes.

I love the predictability of timber frame construction. We can start work on the first house of a development and know that within eight weeks it will be completed. That's the beauty of offsite construction. I also get a kick out of creating employment - 200-plus people get a living from this business.

What do you least enjoy? I wouldn't be here if I didn't enjoy it all. But if I had to choose something, I'd say it was having to dispose of people. No employer likes to do that, even when the cause is outwith their control. But sometimes you have to, for example when there are downturns in your marketplace. What really bugs is when it's an avoidable downturn, caused by superfluous bureaucracy.

What is your biggest bugbear? My answer would have to be the same: bureaucracy. Governments say one thing, but quangos make it difficult to deliver. It's no wonder we have a shortage of housing in the UK when you look at our planning legislation and the infrastructure generally.

My particular bugbear is the concept of planning gain, operated by our local authorities. Developers are asked to contribute to education, public parks, railways, all sorts of things. Why should this be so? What about the income they receive from rateable values? Planning gain supplement is an iniquitous, inflationary practice which is ultimately passed on to the hard-pressed customer.

What are your ambitions for the firm? To see it expand and grow to a £100m-per-annum business in the next 10 years. Timber frame has a superb future, the future is green and that means timber in housebuilding.

What are your top five priorities? Recruiting and retaining employees with the right attitude; you can train for skills, but not attitude. Management development for the top team, bringing forward our succession plans; everyone is totally committed. To continue to deliver what we say we'll deliver, and when; I'd hate that to change - it's our customers who pay the wages. A contented team; it's all down to the team working well together. Profitability - sales are no use without profit.

What single thing would most help? My retirement.

What could the Scottish/Westminster governments do that would most help? The announcement of the increase in the number of housing units needed in Scotland to 30,000 is to be welcomed.

However, if the housebuilding industry is to deliver on those targets, both governments, Scottish and UK, need to attend to radically revamping the planning system and giving us one that works. And this isn't just my business interest speaking here: more and more people are coming out and saying what a bottleneck planning is.

Truthfully, the current system is becoming one of the major disincentives to economic growth in this country - developments can take years to move from plan to a project on the ground, and all the while costs are rising, returns are at a standstill and it affects those we employ and those in the supply chain.

How do you relax? From houses to horses. My son, David, and his mother run a farriers business. My task at weekends is to check the stock of all different types and sizes of horseshoes to establish what is required to be made for the following week. Visiting European destinations with my old "cronies" that I have worked with and respected over my 40 years in business.