Ask Score - August 2016 - What License & Permits are Required to Open a New Business

Ask Score - August 2016 - What License & Permits are Required to Open a New Business

I’m planning to open a small bakery that will also have a few small tables for the retail trade. What licenses and permits will be required?

            Most businesses (but not all) need some sort of license or permit before officially opening their doors or working with clients. Depending on the type of business and your location, federal, state or local (or some combination of them) licensing and permit requirements might apply.

            It’s important to research what you need to have in place to legally operate your business or you could face some hefty fines and penalties.

            According to Hal Shelton (SCORE mentor at the Washington D.C. Chapter, member of the SCORE Board of Directors, and author of Amazon’s best-selling book, The Secrets to Writing a Successful Business Plan), “If you do not have the required paperwork, the governing jurisdiction can shut you down. In most cases, required licenses/permits are for citizen protection so they are deemed important. Other documentation is to identify you and your business so your payment of sales, local, income and other taxes can be tracked.”

            To find out which (if any) business licenses and permits you’ll need, you can start by visiting the Small Business Administration’s website, sba.gov. It provides information about the federal licenses and permits required of businesses operating in certain industries such as agriculture, transportation and broadcast communications.

            The SBA also maintains an online list of links to where you can find specific information about business licenses required in your state. States often have an extensive list of business types that require licenses.

            For requirements mandated by your city and/or county, you can look for information on their websites (just be sure they’re up to date) or contact their offices directly.

            “Many words are used interchangeably—license, permit, registration, etc. Those required at the federal and state levels are usually most widely known. Those at the county and city/town level might take more research. Start early to find which apply to you, what you have to do to qualify, and how long the process takes—it usually takes longer than you anticipate,” explains Shelton.

            “For example, to register your company and its trade name at the state could take 60 days if you do not want to pay expediting fees. To gain zoning clearance might take up to a year if there is some contention and hearings are required. Create an action timeline so all permits and licenses are obtained by the time you want to open your business.”

            In addition to doing your own research, consider asking a SCORE mentor or business consultant knowledgeable about your industry for guidance. And as with anything that affects legal compliance, consult an attorney to make sure you have what you need to meet all federal, state and local business licensing and permit requirements.

 

About the Author

This column is brought to you by the Merrimack Valley Chapter of SCORE, with nearly 70 current and former business executives available to provide free, confidential, one-on-one business mentoring and training workshops for area businesses. Call 603-666-7561 or visit merrimackvalley.score.org for information on mentoring, upcoming workshops and volunteer opportunities. SCORE is a national, non-profit organization and a resource partner of the U. S. Small Business Administration.