Business Licenses and Permits 101: What You Need to Know
Starting (or growing) your business is exciting — but before you dive all the way in, there’s one important piece you can’t afford to skip:
Making sure you have the right licenses and permits.
I know it’s not the most glamorous part of running a business — but it is one of the most important.
Getting it right protects you from fines, legal trouble, and even the risk of being forced to shut down.
Here’s what you need to know to stay compliant and confident:
What Are Business Licenses and Permits?
Business licenses and permits are approvals from government agencies (local, state, or federal) that give you legal permission to operate.
They help regulate industries, protect public safety, and ensure businesses meet certain standards.
Bottom line:
Even if your business is small or home-based, you likely need at least one license or permit to operate legally.
Common Types of Licenses and Permits
Every business is different, but here are a few of the most common types to know about:
1. General Business License
Most cities or counties require this.
It’s basically the government’s way of saying, “Yep, we know you’re doing business here.”
2. Sales Tax Permit
Required if you sell taxable goods or services.
Allows you to collect and send sales tax to the state.
3. Home Occupation Permit
Needed if you run a business out of your home (even online).
Some cities have zoning rules for home-based businesses.
4. Professional or Occupational Licenses
Specific industries (like accounting, cosmetology, real estate, or healthcare) require special licenses to operate.
5. Health Permits
If your business deals with food, beverages, or public health (think cafes, catering, food trucks), you’ll likely need one.
6. Sign Permits
Planning to put up a sign at your business location? Some places require a permit before you can install it.
How to Know What You Need
Unfortunately, there’s no one-size-fits-all checklist.
(Annoying, I know.)
It depends on:
Your industry
Your location (city, county, state)
Whether you sell products or services
How and where you operate (storefront, online, home-based)
Best steps:
Check your city and county government websites
Visit your state’s small business portal
Talk to a small business consultant or accountant who knows the local requirements
It might take a little research upfront, but it’s way easier than dealing with penalties later.
Why It’s So Important
Skipping licenses and permits might seem harmless when you're just starting out — but it can cause major problems, including:
Fines and penalties
Forced closure of your business
Losing the trust of clients and partners
Struggles with business insurance claims
Protect your hard work.
Doing it right from the start shows you’re serious, professional, and ready to grow.
Final Thoughts: Take It One Step at a Time
Licenses and permits can feel intimidating — but you don’t have to tackle it all at once.
Start with your city or county’s basic business license, and build from there.