Does a nice office at a good business address increase valuations?


2

If 2 business are generating the same revenue / profits, would you value a business more (in terms of numbers) because they are located at a good business address? (psychology is in play here)

Business

asked Aug 25 '11 at 21:12
Blank
Prashant
11 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll

2 Answers


2

it's more depend on what kind of business you are running, like

  • if you providing an IT services and only your business team is locating at good place, it'll work for you or as an alternative the business team can offer to meet the client at their office or even a nice restaurant
  • but if you running financial services or consulting services then it does have a great impact on your business growth

but i think now a days your business growth is much more depend upon the word of mouth i.e. if someone suggest it and someone can be your friend, relative, your office colleague or even a newspaper or any user opinion poll also like the movies rating not all movies are enjoyable by all people in the world but before going to watch a film you do consider people's point of view and then you select your piece of treat ...

although if your business is giant in the industry then it certainly has a good impact like google do because they are the industry giant when it comes to search engine and look their offices ... I also say they have the best offices and the impact they have on user is that whatever they do people want to use their services even if it is not up to mark of the user and they take open suggestion/feedback to improve it and by the time they are finish with the testing phase the app/business become up to the users expectation [as they did with google+, and it saved a lot of money which people spent getting user opinion or you can say user/client testing] ...

but at the end business is more about offering services and incentive and continuously presenting it in way to be more user friendly ... it's more of psychological game and if you want to be best in it you have to study your playground, opponents and tools availble before you start playing the game ...

answered Aug 25 '11 at 21:42
Blank
Safran Ali
272 points
  • Thanks for the reply but i don't think you got my question. If you were to buy a business, would you be more likely to pay premium for a business located at a good address as compared to one which is not..keeping everything else constant. – Prashant 9 years ago
  • first does we have a choice on this, as if you buying a business located in NY? no, it's a requirement ... and your question again I won't pay for the location until it is more convenient to the business client base and as per your question if everything is equal than I might consider it to pay more ... – Safran Ali 9 years ago
  • but in practical life it never happens that if two business are equal in terms of services and client base then they both have the nice looking office as they are rivals to each other and they can do anything to make look other one bad ... – Safran Ali 9 years ago

1

The answer is pretty simple; it depends on your clientele. And there's a few ways to figure out if this matters. First, do you know where your competitors are physically located? If you don't, and you know them relatively well, chances are customers won't care either. Second, find some way to get your current and prospective clients to indicate if they know or care where you are. As you're talking to them, try to drop a question like, "Do you know where we are?" and find out if they know - and see, when you talk to prospectives, whether they even ask. Frankly, how many people know where Google is, other than something vague like, "California?".

There are three main considerations for location, as far as I see. First, is there a reason to be physically located near your customers. This goes back to my points above; do they even care? Many IT functions can be done remotely, so it's all about cost and management preference at that customer. Second, are you somewhere where you can recruit the best talent? This has a direct effect on your product, obviously, and being in Podunk, IA means you aren't going to be getting the best people you can get. This doesn't mean just Silicon Valley; Boston, Philly, Austin, all have good reputations for IT talent. Third, how much are you willing to pay? You want to be in Manhattan or some spots in CA, you're going to pay. Is being near certain customers or having certain talent nearby worth the cost? Local taxes matter too - just see how many companies incorporate in Delaware. You'll have to take those factors into consideration.

Of course, outside considerations like whether you are a distributed company with lots of remote workers make a difference too - there are other things specific to your situation that can affect this. But in general, I think the above points cover a lot of the questions you'll have to answer to decide your location. Hope this helps!

answered Aug 25 '11 at 22:59
Blank
Craig Saboe
423 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Business