What is Deferred Maintenance?
The Short Answer
Deferred Maintenance explained simply
Deferred maintenance is when you put off fixing things that need to be repaired or maintained. Think of it like delaying an oil change for your car. It might save you money now, but it could lead to a much bigger, more expensive problem later. For a business, this could be anything from a leaky roof to outdated machinery. While it might seem like a good way to save money in the short term, it can hurt the business's value and operations in the long run.
Real-World Example
The Aging Apartment Building
Imagine an apartment building owner who decides not to fix a few minor issues, like a flickering light in the hallway, a loose handrail, and a small crack in the parking lot. Instead of spending money on these repairs, they use the funds for other things. Over time, these small issues become bigger problems. The flickering light might lead to an electrical short, the loose handrail could cause an injury, and the small crack in the parking lot could turn into a large pothole, damaging cars. When the owner tries to sell the building, a buyer will see all these neglected repairs and either demand a lower price or walk away, knowing they will have to spend a lot of money to fix everything.
Why this matters
Deferred maintenance matters because it can significantly reduce the value of a business. Buyers will factor in the cost of these delayed repairs when making an offer. It can also lead to operational problems, safety hazards, and a poor customer experience, all of which can negatively impact a business's profitability and reputation.
Always address maintenance issues promptly. It saves you money in the long run and keeps your business attractive to buyers.
Always address maintenance issues promptly. It saves you money in the long run and keeps your business attractive to buyers.
Curious what your business is worth?
Deferred maintenance can impact your business value. Get a free estimate.
