Are you looking to start a business but don’t know where to start? Effectively navigating the regulatory and licensing requirements where your business will operate is a very important aspect.
Depending on where your business is located and the type of business you’re looking to start, there’s almost certain to be some type of business license (or permitting) required that will grant you the legal right to operate. Knowing what license(s) you’ll need, the associative initial and ongoing costs of licensing, and compliance with licensing is essential to your success.
What is a Business License?
A business license is any kind of permit required by a government entity (i.e. city, state, county, etc.), without which, a business cannot legally operate. In almost every instance, businesses are required to be properly licensed before they begin providing goods and services in exchange for money.
What Does a Business License Do?
In addition to keeping track of and regulating who is involved with which businesses in a specific locale, a business license makes it easier for government entities to enforce laws and statutes around certain industries, collect revenue, enforce or impose zoning restrictions, etc. Proper licensing can be beneficial to a new business, as an operating license is often viewed by potential customers as a sign of legitimacy.
Benefits of Business Licenses for Startups
- Can assist in staying on top of taxes
- Can limit personal liability
- Can help in accessing funding for new businesses
- Help to build trust among certain demographics of customers
How to Get a Business License
Not every state or municipality requires a business operating license, and the process to get one can vary by locale and business type. That being said, here are some basic steps toward getting a business license:
- Research Which Licenses You Need. If you don’t have an MBA or a lawyer, this can be tricky, especially because some businesses and states will require licensing at the local government, state, and federal government levels. Reach out to your local U.S. business Administration (SBA) office or Chamber of Commerce if you need help.
- Secure the Funds Needed to Pay for the License(s). Before you go any further, find out the exact license fees and make sure you have the money — or credit — to cover the costs.
- Form Your Business. To form your business, you need to decide on a business name. Whether you want to form an LLC or not is up to you, but it can be beneficial.
- Apply for your EIN (Employer Identification Number). If you choose to incorporate your business in any capacity, you need to get an EIN through the IRS website.
- Fill Out the Business License Application(s). Depending on the types of licenses and permits you’ll need to have to operate legally, you may be able to fill out applications online, in city or state offices, or both. Some licenses can be relatively quick and painless to acquire, while others may take more time and effort. Be sure to begin the licensing process with enough lead time to have all the permits and licenses your business needs to begin selling your goods and services on your opening day.
- Pay Attention to License Renewals. Business owners have to stay on top of renewing any and all professional licensing that enables them to operate. Don’t let a lapse in a local license, state license, or federal license shut you down for even a day.
Business License Example: Lawn Care Companies
Let’s look at the practicalities of business licenses and permits as they relate to lawn care professionals and companies. To go into business as a lawn care professional or LLC, you’ll need to acquire the specific business licenses all companies in your state and town have to acquire, but you can’t stop there.
Because of the nature of the job, lawn care businesses and professionals will also likely need to acquire an applicator’s license and a pesticide license, depending on the types of services being offered.
Basically, it’s important to know your niche well to ensure you’re in compliance with all regulatory bodies. Not only will doing so keep you legally in business, but oftentimes, licenses and permits include guidelines that will keep you and your employees — and your customers — safe.
Where to Find Out About Business Licensing Requirements by State
Click on the links below to find out what state business licensure requirements are in place where you live. Some of the links connect to the state’s Department of Revenue. Some of the links connect to the state’s Secretary of State or Department of Consumer Protection or Business Development Center. All of them address state-required licensing for new businesses. Keep in mind that, depending on your business type and the county and/or city where you live, there may be more licenses required than what is linked here.
Are you interested in learning more about a Green Group partnership? Or are you looking for a lawn care career with a company that values its employees? Find out what makes Green Group unique today.
