Business Licenses & Permits Overview

The last thing you’d want to do is start a business that’s accidentally operating outside of the law! If you’re starting a business or organization that works in one of the following industries:

  • Fish & Wildlife

  • Transportation & Shipping

  • Mining & Drilling

  • Radio & Television

  • Nuclear Energy

  • Food & Drinks

  • Alcoholic Beverages

  • Explosives

  • Farming

  • Flying


… then there’s a high chance that you will need some sort of permit or approval from the federal government. At the local and state level, there may be more specific requirements for permits, like for restaurants or retail vendors.

Most licenses and permits also cost a small fee to apply and to get, and they expire at some point, so know those costs when minding your budget and financials. At the same time, think about other aspects of regulatory compliance like what kind of business or organization you want to file as, any forms of insurance you’d want to use to protect your business, and any certifications you’d need to get to do your job.

If you’re confused about getting a business license, you’re not alone. Business licenses are just approval from your city, state, or country that lets your operate a business. Being properly licensed also allows you to complete taxes correctly, since the government uses licensing as a way to keep track of business revenue.

Business licenses usually range from $50 to $400 each. Approval for applications can take anywhere from a couple days to multiple weeks. So display your licenses proudly, you may even be required to display them, actually! Because business licenses can vary by city and state, check out your local city’s requirements and search “Business Licenses” to find applications for licenses. Some common business licenses include:

  • Business License - general licenses issued by the local and state government for all businesses. These are two separate licenses. If you’re working in multiple states, be sure to know federal rules and rules for each state you’re operating in.

  • Home Occupation Permit - a license for businesses run out of a personal home. If your neighborhood is not zoned for home businesses, you might have to file for an exception.

  • Zoning Permit - sets guidelines on what businesses can operate in a certain areas. Residential zones, commercial zones, industrial zones, etc. all have different rules.

  • Sales Tax License - Most states have sales tax on top of goods and services that are sold, so you will likely have to attain a sales tax license unless your state does not have sales tax.

  • Seller’s Permit - allows you to buy wholesale goods from a manufacturer without paying sales tax. Buyers pay the sales tax when they buy the goods that you are reselling.

  • Federal Licenses - are specific to some categories of businesses that need permission from the federal government. Most small businesses don’t fall into these categories but double check!

  • Industry Specific Licenses - are required for health or professional services, like for restaurants to serve food and for lawyers to give legal advice

Common permits you may need

  • Fire Inspection Permits: are usually granted from your local Fire Department and gives you permission to to have, store, use or handle materials and to do activities that may be potentially dangerous. A permit does not replace any license required by law. This varies by location, and an example of a fire inspection permit in San Francisco can be found here.

  • Public Safety Permits: are usually granted by the police department and they can include parking permits, food serving permits for food trucks and restaurants, or even to provide electric scooters. If your business or company provides services that might affect your customers’ health, like with food and drink or with physical activities, then you may require public safety permits from your city and state.

  • Seller’s Permits: generally, if you’re if you make three or more sales in a 12-month period, you are required to hold a seller’s permit. For both wholesale and retail business, this is your permission to do business in the state.

  • Land Use or Zoning Permit: zones are the general plans separating community spaces by usage, like residential or commercial. A school and households would be in a residential zone, whereas a strip mall would be in a commercial zone. Consider how schools are usually near parks but not near factories, that’s by design! Make sure you can operate your business in your location and that it abides by local zoning laws. If you need an exception or special use permit, you may need to apply for an exception. For example, a liquor store near a high school may not be able to sell hard alcohol or may not be able to be open after a certain time.

  • Building Inspections & Permits: is usually granted by the city government for making any changes to a building and to assess if your workplace is up-to-code. A bar needs an alcohol license and a dental office needs a specific permit for this sort of professional service. This varies by location, check out an example of a building inspection permit in San Francisco.

Pro Tip

Most small businesses need a combination of licenses and permits from both federal and state agencies. Learn more about the requirements, fees and application process through the Small Business Administration.