Most states and many cities and/or counties impose licenses and permits on a wide variety of businesses, and it is very likely your business will require more than one license or permit. Failing to get all required permits right from the beginning is one of the most common mistakes new entrepreneurs make. This mistake can be costly, in delays and penalties.
Contact your town or city offices to inquire about getting a business license. You may find that your city has a licensing department that will provide the necessary application form(s) required, and specifying the costs of licenses for different types of business. When you file your license application, the city planning or zoning department will review the application to make sure your area is zoned for the purpose you want to use it for and that there are enough parking spaces to meet the city codes.
Some license and permit types you may need for your business include sign, fire inspection, health department, air and water pollution control permits, and licenses from city, county and maybe even the state. You will also need a federal license in some cases, as well as a sales tax license if you collect taxes on sales.
Certain businesses and professions like barbers, contractors and most businesses serving food, require a state license. There are state agencies to deal with each of these types of businesses, and each will have a licensing procedure. Businesses providing investment advice or dealing with firearms are highly regulated and will also need a federal license. If you’re considering this type business, it’s best to consult an attorney.
If you’re planning to start a business in your home, investigate zoning ordinances especially carefully. Many residential neighborhoods have strict zoning regulations preventing business use of the home. Even so, it’s possible to get a variance or conditional-use permit, and in many areas, communities are becoming more supportive of home-based businesses. Some home businesses require a general business license, a home occupancy license and a specialty license.
The permits, registrations and licenses required vary greatly according to locality and the nature of your business. Chances are, you need a business license from your municipality. Virtually all cities and counties require that all businesses obtain a business license, strictly for the purpose of raising money for the city or county rather than to regulate the businesses’ conduct, much like the manner in which restaurants are supervised for sanitary conditions.
If you’re structuring your company as a sole proprietorship or a partnership, you have the option of choosing a business name, or dba (“doing business as”), for your business. This is also known as a fictitious business name. If you want to operate your business under a name other than your own (for instance, Carl Derringer doing business as “The Sign Shoppe”), you may be required by the county, city or state to register your fictitious name.
If your community doesn’t have a formal licensing procedure, file a “DBA” document with your Town Hall, and take a copy with you so you can get a copy for your file with a date stamp on it. You can find links to the website of virtually every regulatory agency in North America at the Council on Licensure, Enforcement and Regulation‘s Web site.