Ask Jo Malone: Moving with times may be the way to cope with business-rate burden

Small business agony aunt Jo Malone on how to handle a business rate rise and the importance of evolving.

Dear Jo

I’ve got a long lease on my café and we’re doing well on a busy street in Kensington.

However, my business rates are about to go up by £30,000 a year.

Several of the other independent shops and cafés on the road have already upped and left, but I don’t want to do this.

Do you have any advice?

It’s a shock to any small business when you get hit with a £30,000 bill, unexpected or otherwise.

The basics of business rates are that you can anticipate them to be around half of what you pay in rent. If your rates are now in excess of this, you have a case for the Valuation Office Agency to review.

When you say that your neighbours have upped and left, you have to ask yourself the question “why?”. Is it because of ever-increasing rents and rates, or possibly an evolving community of shops, much like the effect out-of-town supermarkets had on the local High Street?

As you know, I’m a great advocate for resilience being one of the defining character traits of great entrepreneurs. So when you say you want to stay, it makes me proud. However, the heart’s desire to stay has to be tempered with a reality check.

Whenever we are faced with such circumstances, the question is always asked “what could be good about this?”. In your situation, there has to be a resolution as to how you will meet this challenge. How can you grow your business to overcome these financial demands, maybe even revolutionise your business?