A Business Improvement District (BID) is a business-led initiative within a defined geographical area of a town, city, business district or rural area, not restricted by statutory boundaries, where businesses work together and invest collectively in local improvements to their business environment.

These improvements and services will be in addition to those services delivered by the local authority. Through consultation, normally carried out by a steering group, a range of projects and services are agreed and a business plan developed. This is then put to a democratic vote involving all the eligible businesses in the proposed area.

A BID is often, although not exclusively, a partnership arrangement through which the local business community and statutory authorities can take forward projects which will benefit the local economy.

A BID is not a substitute for central or local government services, but is a way additional funding can be raised which businesses then decide how to use to strengthen the local business economy.

By giving local businesses a unified voice, a BID can provide an arena for businesses and local authorities to increase their understanding of each other's priorities.