How to Get a Business License

Do I Need a Business License?

Generally, businesses are required to get a business license to ensure that they are complying with government regulations.

Licensing for your particular business will depend on what type of business you operate and where you are located. There are federal, state and local licensing requirements that may apply to your business.

You can either apply for your business license through your local government office or use an online service to assist in the process. Keep in mind that even if you operate a business from home, you will most likely need to have a business license. Home based businesses are not excluded from licensing laws.

If you want to work directly with your local government office, you can avoid a service fee and complete the application process yourself. Business.gov can provide information for your local area and type of business at their website. You can enter your zip code and business type, and you’ll receive information on licensing requirements as well as permits, tax documentation and contact information that is very helpful.

Once you know which licenses and permits you need, you simply fill out the documentation and turn it into your government office along with the license or permit fees. Remember to pay your license renewal fees to avoid paying penalties.

Also keep in mind that if you need to apply for new business financing, you’ll likely need to provide proof that you’re licensed to be in business.

Restaurant Business License

Of course, licensing requirements for a restaurant business will vary by location and the type of restaurant you operate. That said, here is a general idea of licensing requirements you can expect.

  • Business license
  • Alcohol and beverage license
  • Building permit (if you plan to do construction) or zoning permit (if you are developing land for business use)
  • Health permit
  • Occupational permit (often for home-based businesses)
  • Signage permit
  • A sidewalk cafe generally needs a sidewalk cafe permit

There are also employment and insurance requirements, which you can also get information on at the SBA.gov website. If you want to get an idea of insurance cost before you speak with an agent, you can get information on business insurance online for your particular business in your state online.

If you are interested in starting a catering business or preparing food products at home, your cooking space will need to be inspected by the Department of Health before you can obtain a license to sell your food. If you will be packaging food products for sale (with product labeling), you may also have to maintain a standard recipe.

Beauty Salon Licensing

Whether you are operating a hair salon, nail salon or cosmetics business, you’ll typically need to obtain a cosmetology license if you will be performing beauty services.

  • Business license
  • Building permit (if you plan to do construction) or zoning permit (if you are developing land for business use)
  • Health permit
  • Occupational permit (often for home-based businesses)
  • Signage permit

Business Licenses for Specialized Services

Many service businesses require that you have a specific business license in order to perform that service for clients. This is an addition to a regular business license.

The salon business above is a good example of this – in order to perform some type of beauty service, you need to obtain a cosmetology license. A general contractor would need a contractor’s license, a day care provider would need a child care license, etc.

On the other hand, some service businesses don’t require a specialized license, but may have other regulations. For example, to open a photography business, you don’t need a photographer license, but you might need additional permits to occupy a certain space where you run your business.

Since there are a variety of different businesses, and regulations in different areas vary, it’s always smart to contact your local government agency to make sure that you’re complying with proper requirements.

Retail/Sales License

For most retail and office businesses, the District of Columbia Department of Consumer and Regulatory Affairs states that a general business license is required. If the retail business falls in the food category or offers a specialized service, additional licenses or permits may apply.

If you want to start an online store or other online business, Business.USA.gov says to check with your local government office to see if a business license is required in your city or county. Most online merchants work at home, but this does not mean that a business license is not required. Local zoning laws may require you to have a business license or home occupation permit.

Import-Export License

If you are thinking about starting an import/export business, here is some information on licensing and regulations that you may find helpful.

For exporting, a commerce export license is required in certain situations. To determine if you need this license, you want to start by asking 4 questions: (1) What are you exporting? (2) Where are you exporting? (3) Who will receive your item? (4) What will your item be used for? More information here

According to Informed Trade International, certain types of products require a license to import, including alcohol, tobacco, firearms, animals, copyrighted work and food. Each product type is regulated by a different agency. It can be helpful to contact and work with a Customs Broker to assist you, especially if you are new to the field of import-export. They have valuable knowledge and access to systems that can be very helpful to your business.

The NCBFAA (National Customers Brokers & Forwarders Association or America) offers an online directory where you can locate Customs Brokers in your area.

Licenses for Mobile Businesses or Kiosks

If you plan to operate your business from a kiosk or as a mobile service, here are some licensing issues you want to consider:

  1. You need to obtain a business license to operate, just as you would a non-mobile business
  2. If you haul a cart similar to a trailer, you must get a license from the Department of Motor Vehicles
  3. If you serve food, you’ll need a permit from the Department of Health

Another issue to consider: shopping malls often have carts/kiosks permitted and insured.

State and Federal Licensing Requirements

According to MySmallBusiness.org, these businesses typically require a state license:

  • Accountants
  • Appraisers
  • Auctioneers
  • Barbers
  • Bill Collectors
  • Building Contractors
  • Cosmetologists
  • Private Investigators
  • Private Security Guards
  • Real Estate Agents

Typically, these businesses require a federal license:

  • Broadcasting
  • Drug Manufacturing
  • Grand Transportation
  • Investment Advising
  • Manufacturing Tobacco, Alcohol or Firearms
  • Preparing Meat Products
  • Selling Firearms

Penalties for Not Having a Business License

The cost and process of getting a business license is minimal compared to the penalties a business can face not having one. If your business is caught operating without a license, a number of things could happen:

  • You could face fines for not being licensed.
  • Your company could be forced to close until it obtains a license, and there may be a a waiting or “suspension” period.
  • In some industries, people practicing without a license (ie. doctors) can face criminal charges.
  • If an angry customer finds out that your business is not licensed, they can sue the business.

The actual penalty and fees assessed depend on the type of business, licenses required and city in which the business is operating. You can check with your city – or simply just get licensed. =)