Overview Of A Business License
One of the most important steps – while setting up a business – is securing all the necessary business licenses you need to function effectively. The purpose of these business licenses and permits is to keep all operations transparent and keep consumers safe. Requirements and fees vary between states and industries. But every business needs at least one license.
A business license is a government agency-issued document that permits you to operate a business within the region that said agency governs. So, a business license could refer to a local business license that allows you to conduct business within a certain town or city, or it could refer to a seller's license that allows you to sell a particular product within the area.
Failure to comply with any license requirement or regulation can have serious negative consequences for you and your business. Therefore, we have compiled this quick guide to help you understand the different types of business licenses. As well as how to get them.
Types Of Business Licenses
Depending on your industry, type of business, and which state you're in, you may need to obtain different business licenses at a state, city, and county level.
Here is a list of the most common types of business licenses a small business may require regardless of the state or county:
1. Business Operating Licenses
The state and city issue these licenses to grant you legal permission to operate your business within the city and state. Some areas may require you to have different licenses for the states and city levels.
2. DBA (doing business as) License or Permit
If your business operates under a different name and is legally registered with another then you may need to get a DBA license and name. The requirements for this license vary by state and location.
3. Planning And Zoning Permits
There are regulations for where and which business types can operate in each municipality. Before starting your business, you need to verify that you are operating within the specified zone sanctioned for your type of business. If not then you will have to prove that your business will not create a nuisance for the community. Along with which you will have to apply for a zoning variance.
4. Building And Home Occupation Permits
Applying for a building permit is necessary to ensure that the building you are working out is up to standards. This is also a necessary part of applying for business insurance. Find the best business loan lenders so that you can find a building best suited for your business. And suppose your business operates out of your home. In that case you will have to obtain a home occupancy license to ensure that your neighborhood is zoned for commercial activity and that it does not create additional noise or disturbance.
5. Fire Department Permits
This permit is necessary so that the local fire department can verify that your business is operating safely. And that it does not violate any health and safety regulations.
6. Tax Regulations
One of the more confusing and yet essential elements of running a business is making sure you are meeting all the required tax regulations. Without this you won't be able to hire employees and collect payroll taxes.
7. Health Licenses And Permits
Depending on your business industry and location you need specific licenses to verify your specific health regulations and ensure they are up to standard. For example, this type of license is extremely important for businesses in the food and beverages industry.
8. Environmental Licenses
The government has made it mandatory to acquire an environmental license in certain areas to protect environmental factors like water and air quality.
9. Sign Permits
Sometimes local governments have laws to regulate business signs. Like how big it is and where it is placed so that it does not disturb others.
10. Industry Specific Licenses
The SBA has specific requirements for certain industries and these include:
- Alcoholic Beverages
- And More
“Business owners need to be aware that requirements and regulations of all these different types of business licenses change frequently”
How Much Is A Business License?
The cost of these small business licenses varies between states, counties, and industries. A general estimate of the processing and filing fee and the license itself can add up to anywhere from $50 to $100 or more. But again, this depends on the location, industry and specific regulations that govern your business. Your license can have an expiring date so when you get it renewed you will have to cover any associated costs.
Requirements and regulations of all these different types of business licenses change frequently. The SBA advises business owners to constantly check for any updates on the licenses to be aware of any additional fees or requirements.
How To Get A Business License In 4 Steps
The process for each license is different. But here are four steps to follow so that you know what to expect while obtaining a business license;
1. You can find which licenses you'll need for your area, county, city and state by researching the regulations in your area. If you can't find anything online you can always contact your local government agency's representative for assistance. Similarly, you may find your local U.S. Chamber of Commerce helpful in guiding you through the process of setting up your small business and acquiring the necessary licensing.
2. Pay the application fees and submit the necessary paperwork plus any other requirements that are mentioned.
3. Wait till your application has been approved. The approval duration can vary from state to state. Once your license has been approved then you can then legally operate your business in the area.
4. If and when your license expires then you will have to renew it according to the guidelines provided by your state, city and county.
Other Resources To Getting A Business License In Your State
We have combed through all the state and federal resources to provide this information to you. For more details, just check out your state's respective governing agency. Or you can visit the SBA website for assistance. Enter your zip code to find a detailed list of license requirements for small businesses in your