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W hen you’re in the thick of starting a business, it’s easy to overlook the need for having accurate and up-to-date licenses and permits. Getting a license isn’t one of the most exciting things about building a business, so it’s no wonder that this is one of the most common mistakes entrepreneurs make.
However, the costs of starting and operating without the correct business licenses and permits are high. Your business’s credibility, longevity and profitability are all at stake. To make sure your business is an official legal entity, it’s pertinent to secure the necessary federal, state and local taxes. Let’s take an in-depth look at where you can find out which licenses are applicable and how to obtain them, so you can operate without the fear of facing a fine or, worse, shutting down.
A business license gives you permission to open and operate your business in a specific jurisdiction. Business licenses are typically issued by cities and municipalities; therefore, every city and town in the U.S. might have different requirements and license costs.
"I have a business certificate — is it a business license?"
"What is the difference between a business certificate and a business license?"
We knew these questions were coming. There isn't a difference between the two. Some states refer to a general business license as a business certificate or business tax certificate.
You might think you're set with having just a general business license, but sometimes that might not be enough. Here's why.
Depending on what type of business you run and what you require for a job (example: if you need to transport something heavy across states or are organizing an outdoor public event), you might need to file for a federal, local or even professional license or permit. Below, we've highlighted some common business licenses that could be applicable to your business, even if it's a home-based business or a side hustle .
If your business is regulated by a federal body, then you’ll need to apply for a federal license. Industries controlled by federal agencies include alcohol, aviation, transport of animals, agriculture, manufacturing or sales of firearms/explosives and commercial fishing. Here’s a list of industries that require federal licenses .
Business activities commonly regulated by the state or local bodies include real estate , auctions, construction, dry cleaning, farming, plumbing, restaurants, retail and vending machines. Most states require a general business license and a DBA if you’re operating a business under another name.
States also stipulate the sales tax permit your business will require. Yes, some states require this even if you’re strictly selling online. A seller's tax permit is sometimes also referred to as a resale permit, resell permit or Certificate of Authority .
Certain types of businesses require special professional or occupational licenses. These requirements vary from state to state. For example, a few states require child care and senior home care businesses to obtain special licenses, while others don’t. Professions such as medicine, architecture, law, nursing, private investigation, teaching and accounting often require special professional licenses.
If your business involves any construction work (roof repair or putting up signage) on your business location or another, then you’ll require a building and construction permit.
Zoning laws are a way the government keeps business areas business and residential areas residential.
Zoning laws can determine whether you can operate a home business or side hustle in your area. Some states' zoning laws even dictate how much percentage of your home is dedicated to a business. Many states and localities require you to get a home occupancy permit, especially if your community restricts home-based businesses.
An excellent resource for your local zoning and operating laws is the nearest Small Business Development Center (SBDC) .
Any business that deals with the preparation or handling of food/beverages will require a health permit. Health permit costs depend on the size of the business and the amount and type of equipment you have, but you can expect to pay between $50-$100. Some other businesses that require a health permit include tattoo parlors, waste management services and breweries.
As licenses and permits requirements can vary extensively between states and industries, you could find yourself down a rabbit hole trying to weed through information on what is required. So, how do you research a business license?
A Business License Research Service can help.
It's certainly time-consuming and costly to navigate through multiple regulatory bodies to find which licenses you need.
A business license research service can make this task a whole lot simpler and quicker; it'll also help you avoid making one of the most common entrepreneurial errors . Here's how it works — you'll be required to provide certain information regarding your business (what you do, location of a specific task, business address, etc.).
The research service takes all of this information and generates a consolidated list of required licenses, applications and instructions for obtaining the licenses.
But, don't just go for the first business license service listed on Google. There are differences in services and here's what you should look for.
There is a lot of nitty-gritty in starting a business, and securing the right licenses is one of them. Failure to secure and renew licenses and permits opens you to hefty sanctions and notices and in some cases, it'll impact your ability to stay in business. We understand that identifying and filing for the right licenses and permits can get overwhelming and complicated. Investing in a Business License Research Package will not only save you time but also give you the confidence that you’re operating your business by the law.
Bizee's Business License Research Package will eliminate all the guesswork associated with determining which licenses might be applicable to your business. Our service will provide you with a comprehensive package of all the licenses, permits and tax registrations required as well as the updated application forms, filing instructions and fee schedule.
Swara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters. Read more
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