A BID is based on a precisely defined geographical area within which the majority of businesses have voted to invest collectively in local improvements to enhance their trading environment and attract more business. Business rate payers within that area decide the new or expanded services required to improve business, which are to be funded through a levy based on the rateable value of their business premises.

​

A business plan is drawn up setting out how the money raised will be spent for the benefit of businesses within the BID. The BID does not affect the existing level or quality of services provided by local authorities in the area. It provides improved or additional services, identified by local businesses, over and above the services already being provided by local authorities.

​

A BID can only be set up following a ballot of all the businesses that will be paying towards its costs. For the ballot to approve the setting up of the BID two majorities must be achieved. First, the majority of those voting must support the proposal; and secondly, the rateable values of those businesses voting for the proposal must be greater than that of those voting against.