A license is permission to do something or use something. A permit is another form of license that is granted by a government agency after some type of inspection is performed.
Depending on your business, you may need to be licensed at the federal, state, and/or local level. Keep in mind that regulations can vary greatly by the industry you are operating in, the state where you live, and the locality of your business. Some businesses may require several licenses while some businesses may not require any. A great tool to assist you figuring out your license and permit requirements (if any) is the SBA.gov search for Business Licenses and Permits. This web resource provided by the Small Business Administration will allow you to enter the state, city, or zip code of your location and choose your business type in order to research licenses and permits in your area. As a small business owner, you may be starting your business out of your home. If you are using this option, you should still investigate zoning ordinances very carefully because residential neighborhoods tend to have very strict zoning laws.
You may also contact your city’s business license department to get information about obtaining a license to operate your business. Keep in mind that once you file your license application with the city where you will operate your business, the city planning or zoning department will check to make sure that the area you have specified to operate your business is zoned for the type of business activity you have listed in your application. If the area where you are seeking to operate your business is not zoned for your type of business activity, you can request a variance or conditional use permit from the city. In order to get the variance, you will be required to present your case before the city’s board or planning commission.
One key factor to consider when starting your business in relation to licensing and permits is the concept of “grandfathering.” “Grandfathering” means that a new law or code is not enforced against business that are already in operation at the time the new law or code is passed. So, that means a particular business similar to yours in the local area may not be subject to the same compliance issues that your business may encounter. This is an important thing to remember especially if you purchasing an existing business. Once a business changes hands, the new owner is obligated to bring the business into full compliance with the licensing and permit laws whereas the previous owner may have received exemptions.
As you plan to open or expand your business, understanding the required licenses and permits will be an important factor to consider prior to your grand opening. Take the time to speak with a representative at your local licensing department in order to get a detailed review of what is needed to make your business fully compliant within your locality. Once you have handled the task of acquiring the proper licensing and permits for your business, it will make it a lot easier to focus on the exciting prospects of operating your new venture.