When I was in a small, casual start-up, they asked us to dress nicely for just one day to impress some visiting investors. None of us had a problem with it; we all had a stake in the company's continued health. It seemed like the natural thing to do, and I'd do it again if needed.
If your clothing says "corporate", you may send the wrong message and drain some interest.
Obviously this varies by area and industry.
why does it matter to you if your customers understand what factors are relevant to running a business?
Assuming you have a competitor that is clean & neat, with employees who are presentable, all things being equal I am more likely to choose them. You & your employees might actually do better work, but you're fighting an uphill battle from the get-go. And that to me is one thing that a successful business doesn't do: immediately put themselves at a disadvantage.
And it's not just customers or investors. It can be vendors, partners and, quite frankly, other employees. Ultimately it's a place of business and there are certain standards that need to be set that otherwise some employees might not set their own appropriate ones (whether it's smell, hygiene, shabby dressing, what-have-you).
To clarify, I'm not saying you have to have everyone in suits to have a successful business. I'm just saying that someone should at least be able to enforce a basic level of present-ability throughout the workforce. Even if that just means "Hey, ABC, you gotta start wearing deodorant to the office."
Why? Because them caring about outward appearances would signal to me that they have a fundamental lack of understanding about what factors are relevant to running a successful business.
Don't get me wrong: if an employee is visiting a customer or business partner, then yes, they should dress up. But the office should be an environment where people focus on their work instead of how they look. My philosophy: people should be able to wear anything they would feel comfortable wearing around a roommate that they don't know well. I think once you provide that guideline, people will auto-adjust towards a standard that is acceptable to everyone.