Although it may not be the most exciting part of starting a business, one can’t-miss step in getting set up is securing the licenses and permits you need to legally operate your new business. No matter how small your business operations are, understanding licensing requirements and permits is essential. Don’t skip this part and risk getting your business in trouble right out of the gate!
Although business licenses and permits can be cumbersome to apply for, they benefit you and your clients. Getting a license for your specific business should be one of the first steps in your business plan because it protects your clients and establishes your trustworthiness.
Below, we’ll walk you through the types of business licenses you may need for your business in hopes of making the process a bit easier for you.
The term “business license” is all-encompassing, which makes it difficult to define. As a small business owner, you will need a combination of licenses and permits from federal and state governments to operate your business legally. The requirements and fees you’ll encounter will also depend on your business activities, location, and rules placed by government agencies.
A business license can be defined as a document issued by a government agency to permit you to operate a business within a specific location and industry. Going by that definition, there’s not one checklist to cover the licenses and permits that every business needs. So, make sure to do your due diligence in researching the requirements for your industry. You can start by calling your county’s or city’s business licensing department to ask about permits and business license requirements you may need to operate in your area.
If you are starting a new business, you may need:
Be sure to research and contact your state business licensing department, to ensure that you obtain everything you might need.
Research the regulations in your city, county, and state to learn the type or types of business licenses you’ll need. If you’re not sure what government regulations apply to your business, the office of the Secretary of State might be a good starting point to ask for assistance.
You may also want to visit the websites of the Internal Revenue Service (IRS) and the U.S. Small Business Administration (SBA) for additional information and resources and any local business development websites specific to your county or town. By using these resources, they can help you determine which licenses and requirements you will need by industry, location, business type, and more.
Each business license application may require different documents, so make sure you go through each form. You can get assistance and ask for more details by calling the licensing office in your county, city, or state or checking their websites. In many states, you may be able to apply directly from the website as well.
To save time and ensure you submit your application with all necessary documents and requirements, you may contact the business licensing office. If you’re technologically savvy, you may do your own research on their websites. Verify the business license cost and make sure you send the right amount for each application. The costs of business licenses can vary by location and agency, but the average cost of a business license is about a few hundred dollars.
Take note that even if you are registered with the state as a partnership or limited liability company (LLC), you may still need local business licenses. And depending on your location or if you’re submitting your application by mail, you may need to wait to find out if your application is approved. You shouldn’t begin any business activity until you receive your business permit, which can be approved instantly or take months, depending on the location and type of agency.
When you receive your business license, take note of the renewal requirements and date. Have a plan or system to remind you of the renewal to avoid letting your license expire, such as a digital calendar reminder on your phone or computer. At best, that happening may require you to start a new application, or at worse, you may be subject to fines or revocation. For instance, if you’re late renewing your liquor license, you could lose the license and be unable to operate that part of your business.
As established, the permits and licenses you’ll need will vary depending on your business location and industry. So, it’s not possible to cover all the licenses you may need in one list. However, here are common licenses and necessary permits:
Whether you’re a freelance chef, plumber, marketing consultant wanting to start a side hustle, or a full-time independent contractor, you’ll need to apply for a business license or two. The application process may need you to do quite a bit of research, but hopefully, this article provided you with information that points you in the right direction and makes the process feel less intimidating. Do your due diligence and get the licenses and permits you need to start your business in compliance with the law, and you’ll be avoiding a common, costly mistake too many first-time business owners make when starting out.
If you think you need more assistance with the licensing process, ZenBusiness is here for you. We’ll take the bulk of the stress and work of administrative duties so that you can focus on running and growing your business.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.