Rules and regulations certainly aren’t the most exciting part of your new small business, but not having your paperwork in order isn’t a mistake you want to make. From business licenses and permits to zoning laws and insurance, make sure your business is compliant from the very beginning.
City business licenses
Apply for a business license with your city’s business licensing department. You absolutely need a city business license to operate. Then, depending on the nature of your business, you may also need a state or federal business license, or both. You need the same licenses and permits for an online business as you would a brick-and-mortar location.
State business licenses
States typically require licenses for businesses where customers’ physical safety or financial well-being depend on the business owner’s knowledge — like building contractors, electricians, plumbers, real estate brokers and insurance agents.
State licenses are also typically required for business owners delivering personal services that can affect a person’s health— like doctors, nurses, barbers and cosmetologists.
Federal business licenses
Federal licenses do not affect as many businesses, but are required for certain industries that affect the public welfare — such as meatpacking, investment advisory services and operating radio and TV stations.
The Small Business Administration’s website provides additional information on state and federal licensing requirements.
Depending on your location and type of business, you may also need a business permit or permits to operate. Many of the same types of permits required by cities are also required by counties if you live outside the jurisdiction of a town or city. County requirements are usually less strict.
Fire department permits
If you handle flammable materials or run a building that will be open to the public, you may need to either obtain a permit from the local fire department or schedule periodic inspections.
If you don’t meet fire safety regulations, you may receive a citation.
Local government agencies are particularly vigilant about enforcing fire permit regulations against businesses where large groups of people gather, such as restaurants, day-care centers and retirement homes.
You may also need a permit from your city’s air and water control department if you burn materials, use products that produce gas or dump any materials into waterways or sewers. For instance, if you use spray paint that emits gas, you may need a permit.
Land use permits
Some cities have restrictions on signs limiting where you can place them, how large they can be and what type of lighting you can use. To see if you need a permit, check with your city’s planning and zoning or development and permit department. If you rent, you should also get written permission for the land use from your landlord.
Sales tax permits
You may need a sales tax permit (also called a seller’s permit, certificate of resale or certificate of authority). Home-based businesses selling taxable goods and services generally need a sales tax permit, as do retailers and wholesalers.
If you plan to sell or handle food, you’ll need a permit from the county health department. The health department will conduct an inspection before issuing a permit.
If you own a bar or serve alcohol of any kind at your business, you’ll need to register and obtain certain permits from the Alcohol and Tobacco Tax and Trade Bureau.
In some cases, businesses will need a large number of permits. For instance, if you operate at multiple locations, you may need permits for each location. Some business owners find this easier to manage if they hire compliance experts to help them research what permits and licenses are needed.