Latin Biz
Ethics of Steel
July, 2006 - Latin America
In March 2003, 32-year-old entrepreneur Michael Lassner, along with Charles Kowalski, launched Allied Steel Buildings, Inc. in Fort Lauderdale, Florida with a starting capital of $27,000.
In 2005, the company had annual revenues of over $32 million making it the largest supplier of steel buildings in North America today. Allied is recognized as one of the world’s leading, most trusted brands of pre-engineered steel buildings. The turning point to its success was based on their ethics of steel and determination to always do right by their customers.
As with many success stories, it all started with people making the best of a bad situation; Kowalski and Lassner received a one-day-notice from their previous steel employer that the company was going out of business. Determined to remain in an industry they loved so much, Lassner invested his entire savings on the start up of Allied Steel.
Next, Lassner and Kowalski phoned all the closing company’s clients and explain the situation and their intention to honor their orders. Only three out of seventy-five customers cancelled their orders. They didn’t make any profit on those buildings, but Lassner felt that taking care of those customers was the right thing to do. As so did those 72 satisfied customers who spread the good word about Allied; their word of mouth recommendations expanded at a tremendous speed throughout the country resulting in a shower of referrals that is still strong today.
Even with just a four person staff, the company grew at a rapid pace. Unexpectedly, the 2004 steel crisis hit the country and overnight steel prices went up 21%. Inconceivably to many, the cost of steel was to increase 65% in the next six moths. With over 300 projects in the fabrication pipeline sold at pre-in-crease prices, Allied once again found themselves with some solid business decisions to make.
Although clauses in their contracts allowed Allied to increase prices, they didn’t feel that was the best move for Allied Steel. Instead, they embraced the losses and worked with their customers and suppliers to ensure the timely delivery of their buildings. This decision, again, went a long way, not only with the customers, but also with the suppliers.
In August 2004, the market stabilized and Allied was the one company that did not cancel its steel orders from suppliers during the time of crisis. Consequently, a new loyalty and confidence was built within the industry insiders. Allied Steel proved they were a real industry player and that they were here for the long term.
2005 was a banner year for Allied Steel both in direct consumer sales and its key retail distribution networks. Today Allied has grown to over forty employees and has created a retail program with significant companies resulting in a distribution network of over 5000 retail centers throughout North America and additional distribution arms globally in 45 countries; many in Latin America.
“The more steel buildings we deliver the more steel we demand; the more we demand the lower our costs. That lower cost then gets passed down to the customers. And how would we do this, by becoming the industries #1 service organization. We want to ensure our place on top of the steel building industry, and so far – we have done just that,” said Lassner.
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