Obtaining the Right Business Licenses
Starting a new business is a considerable process – there are tons of issues you have to resolve before you can start operating. One of the hardest parts about opening a new business is obtaining the right licenses. You need to make sure that you have authorization to be working in the areas that you conduct business. Ensuring you have the right licenses is the first step in being a responsible business owner.
But it can be difficult navigating the types of licenses that you need to conduct business. That’s why we’ve created this guide – we want our readers to have a head start when it comes to obtaining the proper licenses. Make sure to read all the content in this guide if you want to be certain your prepared to start conducting business.
Step 1: Search for Federal Licenses
The first step you should take to find the right licenses or permits is to search for federal licenses. These are licenses or permits that are regulated and required by the national government. No matter where you’re working, you’ll have to have to obtain one of these licenses if it applies to your business.
You can find the different types of licenses that are required by heading to the Small Business Administration site. There is a list of licenses that you should have a look at before determining if you need one. It’s important that you’re extremely careful about ensuring you apply for all the federal licenses you need. You don’t want to get in trouble at a later date!
Step 2: Search for State Licenses
State licenses are typically the most common form of licenses for businesses. Business regulation is more tightly controlled at a state and local level. The licenses or permits that you have to obtain will differ in every state of the country – so will their cost. For example, if you serve alcohol or food, you will need to obtain a state license to make sure that you follow specific regulations and guidelines. Again, it’s important that you make sure you cover every license that you need.
You need to search on Google for business registration in your state. Here you should be able to find an exhaustive list of the different licenses and permits you need to conduct business. Don’t underestimate the importance of this.
Step 3: Apply for Federal Licenses via Agency
Once you have looked at the list of federal licenses that you need, it’s time to head online and find out which agencies you need to apply through. The agency you need to apply through is typically the agency that is associated with the permit. You can apply for the majority of these licenses via the internet. We suggest this as it is a much quicker process.
Step 4: Apply for State Licenses
Next, it’s time to apply for all the state licenses that you need. After you determine the types of licenses you need, you should look up where the state business license offices are. The Small Business Administration provides a list so that you can find out where your local license offices are. While some permits and licenses can be applied for online, we suggest that you head to a local license office to make the process smoother.
These license offices are great for those who want a little help – they also ensure that you’re not missing any important licenses that you need for your business. We can’t stress enough how valuable of a resource these offices are.
There are plenty of consultants that want to charge fees to help people set up their licenses, and while it may be convenient, it’s not necessary. If you don’t have the time to apply for your licenses, you may want to consider this option. But for the vast majority of business owners, this will be a waste of valuable capital in the early stages of your business. You don’t want to pay more than you already have to – obtaining licenses can often be expensive if you’re working with a limited budget.
Don’t let a consultant convince you that you need help applying for licenses. National and local authorities have made it as accessible as possible for you to apply on your own. And as mentioned previously, there are small business license offices in every state to help you with most of your license applications. Consultants are simply offering a service that is almost always available for free.
Stay on Top of Your Operations
If you’re a business that evolves as time goes on, you’ll need to make sure that you stay on top of the regulations in each new market that you enter. Just because you didn’t need a business license or permit when you opened your business, doesn’t mean you won’t need one in the future. You should repeat the above steps every time you adjust your business or enter a new marketplace.
Obtaining the right licenses and permits is crucial if you want to successfully operate a business in the United States. Not doing so can result in fines and the possible closure of your business. Considering the amount of risk involved, you need to be certain you have the right permits in place. In addition, not having the correct licenses or permits can open your business up to litigation from customers or the general public – you don’t want to be exposed to legal claims.
Keep in mind that each jurisdiction has different regulations and licenses, it may be worth considering this when you’re trying to determine the best place to base your business.
If you need any additional information on other components of starting a business, make sure to check out some of the other content we have on our site. We provide a range of different resources to help our readers figure out the best ways to approach building their businesses. We’re also experts at matching people with the right type of business funding – have a look at our blog!
William Anderson has been working with small business owners for the past 10 years. He got his start at an investment bank, but felt that he was too detached from where real people were making decisions that affected local economies. As a result, he took his experience and his MBA degree to work helping local small businesses.