115: Do I Need a Business License? [Podcast]

by | Oct 18, 2016

Need a business license? One of the first places we stop when getting started is the business license. But, what kind of licenses do you need? Where do you go to get them? Today I will deal with these and other related questions to help you get your business out of bureaucracy mode.

“Having a license does not make you a business … revenue does #entrepreneur #businesslicense”]

Business licenses are a tax and not directly related to your legal structure (sole proprietorship, C-corp, S-corp, LLC, etc).

Note – This is not legal advice, but common sense views from those who have been in the trenches.

General Rules of thumb about Business Licenses

  • Solopreneurs rarely need them
  • Creatives rarely need them
  • Home based businesses rarely need them
  • Often when you first start you can get away without them.

When DO you need a business license before you start?

If you fall into one of the following, you need to check out licenses before you get started.

  • Regulated services such as a day care, plumber, lawyer, doctor, food services, etc. These are often regulated by a state board or agency.
  • Storefronts that will have traffic such as stores, offices with lots of visitors, repair shops, etc.

Other Licenses and Taxes that Might Impact You

  • Additional city, county, and state requirements
  • Trade licenses – plumbers, electricians, etc. They vary by location.
  • Home Based Business Licenses (Yes some governments tax you for this)
  • Sales Tax
  • Health and Safety
  • Sign permits
  • Construction permits
  • Home Owners Associations (HOA) – not technically a license or tax

The Painless Business License Process

First, find out what you need. YOU can do this the hard way or the easy way.

Hard way – Start with the Small Business Administration (SBA) and then contact your various government agencies. Check out this chart for contacts you can make to get you started. Make the calls and ask the questions.

Easier Way – Contact your attorney or CPA (if you have one) and they will often do it for you – for a fee of course.

Easiest WayLegal Zoom offers a one stop service that gives you the forms you need. Just buy their package and fill out the forms and pay the fees and you should be good to go.

Then buy them.

If you need anything that is highly regulated – such as trade permits etc, then get them now.

If you just need a standard business license, then wait until you have done about $1000 worth of business first. That way you will actually know what business you are in, and you will also have a sense of whether or not you want to change it.

Links mentioned in this episode:

Do I need a business license to sell online?

Do I need a business license or LLC? 

Legal Zoom Business License Compliance Package – Pay one fee and get what you need.

Small Business Administration (SBA)  – State Licenses and Permits

The Building Your Own Business Course – Takes some work on your part, but worth it.

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About the Author

Dale Callahan

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