Business rates: affecting financial well-being
Business rates don’t just affect business, they eventually affect the community.
09:26 12 May 2013
Small and medium-sized businesses are concerned for their financial wellbeing, especially those trying to take up open spots on high streets. The businesses claim that business rates are much too high and are causing problems.
How business rates affect a business’ financial wellbeing:
- Profit—the business rates are so high at the moment that any small or medium sized business loses a significant portion, or possibly all, of their profit potential.
- Employments—business that do open are forced to employ fewer people in order to try and break even or maintain any kind of profit.
- Prices—the business has the alternative to raise their prices, but with the current economy and dependent on location, they may not realistically be able to charge the types of prices that would make the business truly successful.
- Renovation—a business may not be able to simply move into a shop, but may need to refit and remodel the shop. A small business with limited working capital is unable to do this, which means they may ultimately sacrifice their business.
Does this affect the community as well?
A business’ financial wellbeing definitely affects a community’s economy. Small businesses can have a very positive impact on an area if they are able to thrive. Here’s what a community might experience if business rates are lowered:
- Unemployment—this number could be reduced if small and medium sized businesses could move into an area with lowered business rates.
- Morale—a happy community draws more people with more skill sets, and inevitably more job opportunities.
- Investors—a thriving community with successful people draws investors, which creates a positive loop.
- Depression—financial wellbeing for a business affects the community. Vacant shops tend to become a depressive atmosphere, and tell the community that things are going well. A well-kept high street can cause feelings of hopefulness for individual financial wellbeing.