It is often said that perception becomes reality. Something perceived as new, young or innovative has a higher perceived value in the market. Similarly a company for sale can see an increase or decrease in interest based on how it is perceived by buyers. The site visit by the buyer can cause them to accelerate interest in the opportunity or leave skid marks in the driveway.
Buyers aren’t looking for the smell of brand new leather chairs or the latest gadgets in every office but they are interested in things that give them comfort about the company they may potentially buy and allow them to brag to their friends.
Is the office and warehouse space neat and efficiently used? Or does it give the feeling that things are scattered because there is too much space or cramped because there is not enough space?
Do the employee areas have sufficient lighting and provide the feeling of being in a successful enterprise or does the darkness and drabness emote feelings of a business trying to survive?
Are the phones, the computers and the office equipment relatively up-to-date or do they belong in the Smithsonian?
We were asked some time ago to assist a business owner to determine the market value of his business. We visited the office and saw inventory items going back 20 years, which were stored along side the current inventory, old hockey equipment, fax machines and a very old couch. His office had more paper in it than an Iron Mountain location (and an overly friendly dog). The kicker was when we received the current financial information on green and white dot matrix printer paper!
None of these things affected the objective valuation of this company. It filled a need, it made a decent profit and it had a sustainable value but we also knew that after touring the business, half to three quarters of interested buyers would never go near it again.