Business Essentials: Lifeline: town by the Thames tries to save itself from being dragged under

As businesses desert Walton and trade stagnates, can a community initiative plot a course to regeneration? By Kate Hilpern

Business is sailing away from Walton-on-Thames. Although £100m is being spent on redeveloping the Surrey town, it feels run-down and fragmented, with no real centre. Businesses that haven't already moved out are seeing their trade stagnate.

As result, both large and small firms in the area have acted, forming a business group to try to push through ideas that will make Walton a thriving community again. One of its members is Jane Hall, a store director at the local branch of the Beales chain, itself one of the businesses that will soon shut its doors in Walton. She explains: "Although in 12 months, we'll be on the way to our new shopping centre with 55 new shops, plus 279 new domestic dwellings, more and more players are moving out of the town centre."

Ms Hall's central involvement in the group is a natural progression. "For some time, I have chaired various local business groups, such as the radio-link system in the town centre," she says. "Most stores have a radio, as do the police and the CCTV room, and when there is trouble, like shoplifting, we all talk to each other."

With the Beales store closing, she has the time to take her links with local firms a stage further and drive the business group forwards. Already, she is busy making plans with a colleague who has many years' experience working with Chambers of Commerce and Business Links across the UK. The group, she says, will be a voice to local government, a catalyst for enterprise and a promoter of local business-to-business trading.

But she is not sure how best to develop the group. For example, she asks, should it be a not-for-profit organisation? Should employees be salaried or voluntary? How should it go about getting funding? Does it need a steering committee?

Ideally, she'd like the group to have charitable status, with paying members. Meanwhile, to make the group credible and because so much work needs doing, she suspects employees will need to be paid.

"But I'd like more advice. Essentially, I want to know what the best structure would look like so we are transparent and effective as a group."

WHAT THE EXPERTS SAY

David Frost, Director-General, British Chambers of Commerce

"The group's aims must be clearly defined and regular meetings held that are open to all local businesses. Focus on three key issues. First, arrange meetings with the leaders of the council, and with other agencies in the area.

"The next step is staff - a secondee could be the best option, as it would minimise employment issues. This person should report to a steering group. For campaigning, seek funding from local firms, the council, even the Regional Development Agency.

"Set up a simple company to pay funds into, and only later decide whether to become charitable. After all, this group may only have a limited life if the regeneration of the town centre proves a success."

John Davies, Head of Business Law, Association of Chartered Certified Accountants

"Provided the aims of the group are accepted as being charitable, setting up as a charity brings big advantages: no tax is payable on income or capital gains. But there are restrictions on the amount of commercial work the group could get involved in.

"An alternative approach is the community interest company (CIC), a new type of organisation where profits can be made but have to be applied for the benefit of the community.

"The decision on whether help should be salaried or voluntary will depend on the likely income streams of the project. Bear in mind that even not-for-profit bodies must build up reserves - it is not enough just to break even."

Stephen Pegge. Head of Communication, LLOYDS TSB Business

"Many businesses depend on their local community for custom, staff, supplies and support, yet small firms can have little influence in isolation. Banding together makes obvious sense, although leaders of small firms don't have much time, so engagement can be difficult.

"Formal structures and meetings can be a real turn-off but are important for the credibility of the group in accessing funding and being taken seriously as lobbyists.

"The trick may be to combine the culture of a campaigning group (a crisis or a high-profile lobbying point can motivate people to get involved) with the structure behind the scenes of a more formal organisation."