Know which permits and licenses your business needs to run smoothly
It is probably not too surprising to learn that almost every type of business needs some sort of license or permit from their city, state, or federal government. If you do not want to face potential penalties, it is a good idea to research what permits you will need before you begin operating your business. Here are some general permits and licenses that your business may need:
- General Business License – You apply for this through your city and it gives your business the authority to operate within that city.
- Zoning/Land Use Permits – These permits verify that your business can operate on its property and will also be needed if you plan to build or expand on your property. This is important to check out if you plan on operating out of your home, as some neighborhoods do not allow that.
- Sales Tax License – You need this permit if you sell any products. It is also known as a seller’s permit. Businesses are required to charge a sales tax on their products and this gives them the ability to do so.
- Fire Department Permit – You will need this permit if you handle any hazardous or flammable materials. Some cities also require routine fire inspections to make sure your building is up to code.
- Water/Air Pollution Permits – Your business will need one of these permits if you burn any materials or discharge any products into the sewers or waterways.
- Sign Permit – Some cities have restrictions on the size and position of outdoor signs. Be sure to check the rules where you operate.
- County Permit – This permit is needed if your business operates outside of a city’s limits. You must report to the County’s government.
- State Licensing – Some professions require that you become certified in your profession before you can operate. This can include taking a standardized test.
Here’s a list of common professions which need State licensing:
- Medical Care
- Auto Repair
- Real Estate Sales
- Tax Services
- Insurance Sales
- Cosmetology
- Legal Representation
- Plumbers
- Electricians
- Building Contractors
- Federal Licensing – If your profession or products are regulated by a federal agency, you probably need a federal license to operate.
Here’s a list of common professions that need a federal license:
- Investment Advising
- Drug Manufacturing
- Preparation of Meat Product
- Broadcasting
- Ground Transportation
- Tobacco, Alcohol, Firearms, or Explosives Manufacturing and Selling
- Health Department – This permit is important if your work with food products. You need to adhere to their permits and regulations.
- Unemployment Insurance – Some states require you to have unemployment insurance even if you the only employee. Check with your state and be prepared.
You may need to register your “Doing Business As (DBA)” name with the county clerk’s office if your business’s name is anything other than your own name. You can read about DBA’s in our article. You will also need to get an Employer Identification Number (EIN) to file your taxes. Running your business properly and obtaining the correct permits will prevent you from having to pay possible penalties. Not only that, it will establish your business as legitimate with investors and with customers. Each business must begin somewhere and this is an important first step to realizing your business’ full potential.