Business licenses and permits vary widely, and the right list for you depends on your location, your industry and how you operate.
Business licenses and permits: why they matter
Operating without the right approvals can lead to fines or a forced shutdown, and it can cause trouble when you try to sell or finance the business later. This article is general information, not legal advice. Because rules differ by city, county, state and industry, always confirm with the relevant offices before you open.
- Fines for missing approvals
- Problems when selling or borrowing
- Always confirm with the issuing office
Local business licenses and permits
Most cities and counties require a general business license. You may also need a zoning approval, especially for a home-based business, plus permits for signs, food, or work done on customers’ property. Call or visit your city or county office and ask what applies to your business type. Our guide to low-cost business options shows many businesses that start at home, where zoning matters most.
- General business license
- Zoning or home-occupation approval
- Signage and location permits
State business licenses and permits
States often license specific professions and regulate certain products. A sales tax permit is common, and many fields such as contracting, cosmetology, real estate and food service have their own state licenses. Our guide on sales tax for small business covers the sales tax side. Check your state website or the government business guide for lists.
- Sales tax permit
- Professional or trade license
- Industry-specific state rules
Federal licenses
Most small businesses do not need a federal license, but some industries do, such as certain regulated products, broadcasting or transportation. You will usually need a federal EIN for taxes, and our guide on how to get an EIN explains that it is free from the IRS. The SBA guide to launching your business includes a section on licenses and permits.
- Federal licenses apply to specific industries
- An EIN is free from the IRS
- Use the SBA launch guide as a checklist
How to find what you need
To learn which business licenses and permits apply, make a short list: where you will operate, what you will sell, whether you will have employees, and whether customers will visit. Then ask your city, county and state offices. A local SBDC or SCORE advisor can usually review your list for free. Our legal basics checklist shows where licenses fit in the full setup.
- List location, product, staff and visitors
- Ask city, county and state offices
- Have a free advisor review your list
Keep your licenses current
Many licenses expire and must be renewed. Put renewal dates in a calendar, keep copies in one place and update them if you move or change what you do. If you buy an existing business, do not assume its licenses transfer. Our guide on the business purchase agreement explains why you should confirm that.
- Calendar your renewal dates
- Update records when you move
- Check what transfers in a purchase
Related reading on business licenses and permits
- Legal Basics for Starting a Business: A Checklist
- Sales Tax for Small Business Owners: The Basics
- How to Get an EIN for Your Business
- Low-Cost Franchise Options: What to Compare Before You Buy
- Business Purchase Agreement: Key Terms to Review Before You Sign
- LLC vs. Sole Proprietorship: Setting Up Your Business Opportunity Correctly
- USA.gov guide to starting a business
- SBA guide to launching your business
- America’s SBDC small business advising
- SCORE free business mentoring
