First Steps: Getting Licensed

This is the first post in a series of first steps for creating a successful small business. Entrepreneurs, please stay tuned for more installments!

One of the most important factors that is often overlooked when starting a business is the specific licensing that is required for your business. Every business will need some sort of license or permit, some more than others. It may be hard to understand which licenses you will need, but all businesses have a set of basic licenses and permits. The following are the most common licenses that should be obtained when starting a business. If you plan on starting your own businesses, you should begin by familiarizing yourself with the following:

Business Operating License

The first license you will need to apply for is the classic business operating license. This license is typically distributed and approved by your city or county. This gives you authority to legally operate a business.

Federal Employer Identification Number (EIN)

This identification number is a way for the Internal Revenue Service (IRS) to identify your business and your employees to ensure that tax compliances are met.

Fictitious Business Name

This license is required in most states for businesses to operate under the name that they choose. This will allow you to advertise and establish an image within your community and online to gain more clients and customers.

Health Department Permit

A health department permit is crucial to ensure the health and safety of the work place. This license is critical if your business deals with food, drink, or hospitality to ensure your business is in compliance with the federal health codes.

Zoning Permit

A zoning permit is required for businesses (including at home businesses) to ensure that business activities comply with the law. It also ensures that no major physical changes are made to your home and that nuances are restricted within the residential area. The permit also allows for traffic to be controlled and/or restricted depending on the business.

Sales Tax License

A sales tax number permit will ensure that products or services are properly taxed based on the state and federal regulations.  

Fire Department Permit

A fire department permit will need to be acquired, especially if your business is open to the public (i.e. hotel, restaurant, store). This will ensure that proper safety precautions and preventions are taken into effect in the event of an emergency.

Special State and Federal  Business Licenses

Many businesses will require additional licenses and permits from local and state regulators. Some examples include; cosmetology, auto repair, and tax businesses will require additional special state permits. If your business includes firearms, liquor, gas or lottery, permits will be authorized and distributed through the federal regulators.