10 Types of Businesses That Require a Lot of Licenses

LoriWeiss by Lori Weiss on July 17, 2014
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A business license may be required for all businesses to operate in the U.S., but some industry-specific operations require more licenses than others. These requirements are due to the nature of the business. The licenses are designed to protect those who work within the industry as well as customers and neighbors of the business.

Government authorities thus demand strict licenses and permits within these industries, which include tobacco, gambling, firearms and alcohol. These “sin” industries are so named due to their widespread harmful nature and effects on citizens. The aforementioned four types of businesses require specific government approvals to run legally, as explained below.

1. Tobacco

Each state carries different regulations for the tobacco industry, so be sure to check with the regulating body for your region before operating any tobacco business. Unique licenses are required for businesses that operate throughout various stages of the industry, including manufacturing, importing, retail, distribution and wholesale. For example, different licenses would be required for local smoke shops, gas stations that sell tobacco, smaller regional producers and larger importers.

2. Gambling

Gambling is heavily regulated in most states and is banned in some. In states where it is permitted, gambling is subject to regulatory bodies, typically titled Gambling or Gaming Commission or Board. The process of obtaining a gaming license can be quite invasive, as your background and personal details are heavily scrutinized. This is done to mitigate organized-crime activities and limit the number of licenses issued. Gambling licenses are required to operate casinos and may be required to display slot machines in predominately non-gambling businesses.

3. Firearms

Firearm licenses vary depending upon the variety of firearm as well as the activity for the firearm, and licenses can be issued by regulatory authorities at the local, state and federal levels. Licenses may be required to purchase, own, utilize and/or sell firearms, so review your state’s requirements carefully. Businesses that operate within the firearms sector must ensure that they have the proper licenses from the Bureau of Alcohol, Tobacco, Firearms and Explosives. Licenses are required for gun stores, shooting ranges and sales of fireworks.

4. Alcohol

The Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates businesses that operate within this industry. Any business that manufactures, sells and/or imports alcohol must obtain the necessary licenses to do so. Furthermore, restaurants and food service businesses that purchase, serve and offer alcohol must have a liquor license. These licenses can be particularly costly and vary depending upon the state.

Some other businesses, even those outside of the “sin” industries, have demanding license requirements. Some of these include:

5. Retail

Any retail operation that sells any of the above (tobacco, firearms and alcohol) must obtain the necessary licenses to do so. Simply operating a retail business demands a resale permit, a business license and a use permit to properly comply with tax laws. Retail businesses, which can sell any variety of goods, should ensure that they have the proper licenses to sell the products they offer.

6. Beauty

Spas and salons must obtain occupational licenses, which are usually mandated by a cosmetology board at the state level. Professionals who work with hair, nails and skin at spas and salons must adhere to the requirements dealing with sanitation and health compliance. Cosmetology licenses can be issued after educational training or an apprenticeship, as governed by the state.

7. Food

The food service sector is highly regulated due to concerns about sanitation and the spread of disease. Licenses that are required in this industry include a food enterprise license, food manager certification, food handler permits and inspection certificates, all of which must be acquired before serving patrons. As previously mentioned, restaurants that serve alcohol must also secure a liquor license.

8. Broadcasting

Radio and television companies must obtain a license from the Federal Communications Commission (FCC). Broadcasting companies are regulated to ensure that they operate in the public interest, which means their operations shouldn’t infringe on the public’s rights, health or finances. Since broadcasters control a limited resource, the application process for a broadcast license is long and expensive.

9. Aviation

The Federal Aviation Administration (FAA) issues licenses and permits for institutions that operate within the aviation industry, from transportation to aircraft construction. Licenses are required for pilots, mechanics and medical examiners, airports and spaceports, and even individual aircraft must all receive FAA licenses and certificates. The FAA’s regulations protect not only a large number of people involved in industry operations, but also the nearly 60 million monthly passengers it serves.

10. Nuclear Energy

Due to the extremely dangerous nature of this industry, strict regulations are in place to protect workers and neighboring communities. The U.S. Nuclear Regulatory Commission (NRC) serves to care for people and the environment with its regulations. The licenses and certificates provided by the NRC are for individuals and businesses that utilize, transport and manufacture nuclear materials, as well as those that run nuclear plants and disposal areas.
Licenses are designed to ensure that businesses operate safely to protect their employees, customers and surrounding communities. Government regulations exist for a reason, which is why violating them can result in large fines or jail time. If you plan to open a business that requires a lot of licenses, protect yourself, your employees and your community by ensuring that you comply with all regulations.

LoriWeiss

Lori Weiss is an MBA graduate who specializes in marketing and outreach.

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