How to Get a Business License: A Step-by-Step Guide

What Is a Business License?

A business license is a government authorization that allows a business to operate legally within a particular jurisdiction or conduct certain business activities.

There isn't one universal business license that applies to every business.

The licenses and permits you need can depend on:

• What your business does
• Where your business operates
• Your industry
• Your business structure
• Whether you operate from home
• Whether you have employees
• Whether you sell taxable products or services
• State and local requirements

Some businesses may need a general local business license.

Others may need professional licenses, industry-specific permits, sales tax registration, or multiple approvals.

Do I Need a Business License Before I Start My Business?

Possibly.

Some businesses must obtain a license or permit before beginning certain activities.

Others may be able to begin operating after completing their business formation and other required registrations.

The timing depends on the specific requirement.

Before you begin operating, determine whether your business needs:

• State licenses
• Local business licenses
• Professional licenses
• Industry-specific permits
• Zoning approval
• Home occupation permits
• Sales tax registration
• Federal licenses or permits

If you haven't yet determined whether you need a license, see:

→ Do I Need a Business License?

Step 1: Identify What Your Business Does

The first step is identifying your actual business activities.

This sounds simple, but it can make a significant difference when determining licensing requirements.

For example:

"Consulting"

is very broad.

But:

"Residential electrical contracting"

is a specific activity that may have very different licensing requirements.

Make a list of the products and services your business will provide.

Consider:

• What you sell
• What services you perform
• Whether you work with customers in person
• Whether you handle regulated products
• Whether you provide professional services
• Whether you employ other people
• Whether you operate a physical location

The more specific you can be, the easier it is to identify the applicable requirements.

Step 2: Determine Where Your Business Operates

Your location can be just as important as what your business does.

Start with:

• State
• County
• City
• Physical business location
• Home office
• Locations where employees work

A business operating from a commercial building may have different requirements than a home-based business.

A business operating in multiple cities may have to evaluate local requirements in each location.

And expanding into another state can create additional registration and licensing considerations.

Step 3: Check State Licensing Requirements

Once you know what your business does and where it operates, check your state's requirements.

Some states have broad business licensing requirements.

Other states regulate specific industries and professions rather than requiring every business to obtain a general statewide business license.

Look for the state agencies responsible for regulating your business activity.

Depending on the business, these could include agencies responsible for:

• Professional licensing
• Consumer protection
• Health and safety
• Agriculture
• Construction
• Transportation
• Financial services
• Environmental regulation

Don't assume that finding one state registration means you've completed all of your licensing requirements.

Step 4: Check City and County Requirements

State requirements aren't always the end of the process.

Cities and counties can have their own business licenses, permits, zoning requirements, and other rules.

For example, your business may need a local license based on where its physical location is located.

You may also need approval for:

• Zoning
• Signage
• Building use
• Home occupation
• Special events
• Food service
• Construction
• Occupancy

This is one of the most commonly overlooked parts of the business licensing process.

State registration does not automatically satisfy local requirements.

Step 5: Check Industry-Specific Licenses and Permits

Some businesses require specialized licenses because of the activities they perform.

Examples can include:

• Contractors
• Restaurants
• Healthcare providers
• Childcare businesses
• Transportation companies
• Real estate professionals
• Financial businesses
• Food businesses
• Beauty and personal-care businesses

The exact requirements vary by state and location.

If your business performs a regulated activity, identify the government agency responsible for that industry and determine what authorization is required.

Step 6: Check Federal License Requirements

Most small businesses don't need a general federal business license.

However, certain industries and activities can require federal licenses or permits.

Examples may include businesses involved in certain areas of:

• Agriculture
• Aviation
• Alcohol
• Firearms
• Broadcasting
• Transportation
• Commercial fishing
• Maritime activities

Federal requirements are generally activity-specific.

If your business operates in a regulated industry, check whether a federal agency has licensing or permitting requirements that apply to your activities.

Step 7: Check Zoning Requirements

A business license and zoning approval are not necessarily the same thing.

Zoning determines how property can be used.

For example, a local government may have rules concerning whether a particular property can be used for:

• Retail
• Manufacturing
• Restaurants
• Offices
• Childcare
• Home-based businesses

This is especially important if you're operating your business from home.

A business can be properly formed and still have zoning restrictions that affect how it can operate.

Step 8: Determine Whether You Need a Sales Tax License

If your business sells taxable goods or services, you may need to register to collect and remit sales tax.

Sales tax requirements are separate from general business licensing.

Depending on your circumstances, you may need to determine:

• Whether your products or services are taxable
• Where you have sales tax obligations
• Whether you have sufficient nexus
• Whether registration is required
• How often returns must be filed

Don't assume that getting a business license automatically registers you for sales tax.

These can be separate requirements.

Step 9: Gather the Information You Need

Once you've identified the appropriate license, review the application requirements.

You may need information such as:

• Legal business name
• DBA or trade name
• Business address
• Mailing address
• Business structure
• Owner information
• EIN
• Description of business activities
• Industry or professional information
• Number of employees
• Business start date
• Supporting documents
• Proof of insurance, if applicable
• Professional credentials, if applicable

The exact requirements vary by license and issuing agency.

Having your business information organized before starting the application can make the process easier.

Step 10: Complete the Business License Application

Once you've identified the correct agency and gathered the necessary information, complete the application.

Depending on the jurisdiction, you may be able to apply:

• Online
• By mail
• In person

Follow the agency's instructions carefully.

Pay particular attention to:

• Business name
• Address
• Ownership information
• Business activity
• License type
• Supporting documents

An incomplete or inaccurate application can delay the process.

Step 11: Pay the Required Fees

Some business licenses have application or licensing fees.

The cost can vary significantly.

Factors that can affect the cost include:

• Type of license
• Location
• Industry
• Business size
• Number of locations
• Application type

Some jurisdictions may charge a flat fee.

Others may calculate fees based on factors such as revenue, employees, or business activity.

Check the issuing agency for the current fee rather than relying on a generic estimate.

Step 12: Wait for Approval

Some business licenses may be issued quickly.

Others may require additional review.

The timeline can depend on:

• Type of license
• Government agency
• Completeness of the application
• Required inspections
• Background checks
• Professional credentials
• Zoning review
• Other approvals

Don't assume that submitting an application means the license has already been approved.

If the business requires the license before beginning operations, wait until you've confirmed the authorization has been issued.

Step 13: Keep Your Business License

Once approved, keep a copy of your license with your important business records.

Depending on the jurisdiction, you may also need to display the license publicly at your business location.

Keep track of:

• License number
• Issuing agency
• Effective date
• Expiration date
• Renewal deadline
• Related permits
• Renewal fees

If you operate multiple locations, keep your records organized by location.

Step 14: Track Your Renewal Date

Getting the license isn't necessarily the end of the process.

Some licenses and permits must be renewed periodically.

A renewal may require:

• A new application
• A renewal fee
• Updated business information
• Continuing education
• New documentation
• Confirmation that requirements are still being met

Put renewal dates on your compliance calendar so they don't get overlooked.

Start Tracking Your Business Compliance →

Startup to Corporate helps business owners organize licenses, permits, filings, renewals, and other business requirements so they can see what needs to be handled and when.

How Much Does a Business License Cost?

There isn't one standard business license cost.

Fees vary based on:

• Location
• Business type
• Industry
• License type
• Number of locations
• Business size

Some licenses may have relatively small fees.

Other licenses, permits, or professional authorizations can cost significantly more.

You may also have separate costs for:

• Applications
• Inspections
• Permits
• Professional licensing
• Background checks
• Renewals
• Required certifications

The best way to determine the actual cost is to check the current fee schedule for the government agency issuing the license.

How Long Does It Take to Get a Business License?

The timeline varies.

Some licenses can be issued quickly after a complete application.

Others may take longer if the application requires:

• Government review
• Inspections
• Background checks
• Professional verification
• Zoning approval
• Additional documentation

Before starting a business activity that requires a license, determine whether approval must be received first.

Can I Get a Business License Without an LLC?

Yes, depending on the applicable requirements.

You don't necessarily have to form an LLC to obtain a business license.

Sole proprietors, partnerships, corporations, and LLCs can all have licensing requirements.

However, your business structure and legal name may affect how you complete the application.

If you're deciding whether to form an LLC, see:

→ How to Form an LLC

Can I Get a Business License Without an EIN?

It depends on the license and the business.

Some applications may require an EIN or other federal tax identification information.

Other businesses, particularly certain sole proprietors, may not need an EIN for every purpose.

If your business is an LLC or corporation, obtaining an EIN is generally an important step in setting up the business.

See:

→ How to Get an EIN

What About a DBA?

If your business operates under a name different from its legal name, you may need a DBA, trade name, or similar registration depending on your jurisdiction.

For example:

Legal business name: Smith Consulting LLC

Business name: Smith Business Solutions

A DBA registration and a business license are different requirements.

You may need both.

See:

→ DBA vs. LLC

What If I Operate My Business From Home?

Home-based businesses may have additional requirements.

Depending on your location and activities, you may need to check:

• Home occupation rules
• Zoning
• Local business licenses
• Parking restrictions
• Signage restrictions
• Customer visit limitations
• Employee limitations
• Landlord requirements
• Homeowners association rules

Don't assume that working from home means you don't need a business license.

What If I Have Multiple Business Locations?

Each location may have its own requirements.

For example, a business with locations in three different cities may need to evaluate the licensing requirements for each location.

You may also need to update your registrations if you:

• Open a new location
• Close a location
• Move your business
• Change the nature of your operations

Expansion should trigger a review of your business compliance requirements.

What If I Move My Business?

Moving can change your licensing obligations.

A move within the same city may require an address update.

Moving to another city may require a new local license.

Moving to another state can create additional requirements involving:

• Business registration
• Foreign qualification
• Business licenses
• Tax registration
• Permits
• Registered-agent requirements

Don't assume that a license follows your business automatically when you move.

Business License Checklist

Before considering your business licensing complete, make sure you've evaluated:

• State business license requirements
• City requirements
• County requirements
• Industry-specific licenses
• Professional licenses
• Federal licenses or permits, if applicable
• Zoning requirements
• Home occupation requirements
• Sales tax registration
• DBA requirements
• Application requirements
• License fees
• Required inspections
• Approval dates
• License expiration dates
• Renewal deadlines
• Requirements for additional locations

Your actual checklist will depend on your business activities and locations.

Common Business License Mistakes

Mistake #1: Applying for the wrong license

Business owners sometimes find a general license and assume it's the only requirement.

Make sure you've evaluated state, local, and industry-specific requirements.

Mistake #2: Forgetting local requirements

A state registration doesn't necessarily satisfy city or county requirements.

Mistake #3: Starting before approval

Submitting an application doesn't necessarily mean you've received authorization to operate.

If a license is required before beginning an activity, confirm approval first.

Mistake #4: Providing inaccurate information

Make sure the business name, address, ownership information, and business activity are accurate.

Mistake #5: Forgetting permits

A business may need additional permits even after obtaining a general business license.

Mistake #6: Forgetting renewals

A license that expires can create compliance problems.

Track renewal deadlines from the beginning.

Mistake #7: Assuming an LLC includes a business license

Forming an LLC and obtaining business licenses are generally separate processes.

Mistake #8: Failing to update licenses

Changes in ownership, location, business activities, or other circumstances may require updates.

Business Licensing and Ongoing Compliance

Obtaining a business license is only one part of maintaining a compliant business.

Depending on your business, you may also need to track:

• Annual reports
• Tax registrations
• Business licenses
• Permits
• Registered-agent requirements
• DBA renewals
• Professional licenses
• Insurance requirements
• Government filings
• License renewals
• Other state and local requirements

Some requirements happen once.

Others repeat annually.

Others are triggered when something changes.

Stay on Top of Your Business Requirements →

Startup to Corporate helps business owners organize the requirements that come with running a business so they can keep track of deadlines, renewals, filings, licenses, and other compliance tasks.

The Bottom Line

Getting a business license isn't necessarily a single application.

For many businesses, the process involves identifying requirements at multiple levels of government and determining which licenses, permits, and registrations apply to specific business activities.

A good process is:

Identify your business activities

↓

Determine where you operate

↓

Check state requirements

↓

Check local requirements

↓

Check industry-specific requirements

↓

Apply for required licenses and permits

↓

Track renewals and changes

And remember:

Getting the license is only part of compliance.

Your business may have additional filings, registrations, permits, and renewal deadlines that need to be tracked throughout the year.

Get Your Business Organized →

Startup to Corporate helps business owners keep track of registrations, licenses, filings, deadlines, renewals, and other compliance requirements in one place.

Know what your business needs. Know when it needs to be done.