Business Licenses and Permits, Oh My!

Don’t forget that any kind of business you start needs to comply with local, state, and federal regulations related to your business. Failing to do so is one of the most common mistakes new entrepreneurs make. Some of the issues regarding licenses and permits can be handled alone, but some may require the help of a lawyer.

Federal Requirements

Most businesses do not require a federal business license or permit. However, if your business is in one of the following highly regulated areas you should contact the responsible federal agency to determine the requirements for doing business:

  • Broadcasting
  • Drug manufacturing
  • Ground transportation
  • Investment advising
  • Preparing meat products
  • Selling tobacco, alcohol, or firearms

For more information see “Federal Licenses & Permits” on

State Requirements

Many states and local jurisdictions require you to get a business license or permit before beginning any business activities. A business that operates without the required license or permit may be subjected to fines or may be barred from further business activity. In some localities, a business operating out of a residence may require an additional permit.

While business licensing requirements vary from state-to-state, the most common types include:

1. Basic Business Operation License – a legal document issued by a local governmental authority that authorizes a person to conduct business within the boundaries of the municipality. Many states have established small business assistance agencies to help small businesses comply with state requirements.

2. Fictitious Name Certificate – a document, usually filed with a state agency, which is required to operate a business using an assumed name or trade name (essentially, any name other than the full, formal name of the individual or company).

3. Home Occupation Permit – a permit that may be required to conduct business from a residence.

4. Tax Registration – if the state has a state income tax, a business owner must usually register and obtain an employer identification number from the state Department of Revenue or Treasury Department. If the business engages in retail sales, the owner must usually obtain a sales tax license.

5. Special State-Issued Business Licenses or Permits – these permits may be required for a business that sell highly regulated products like firearms, gasoline, liquor, or lottery tickets.

6. Zoning and Land Use Permits – may be required to develop a site or property for specific purposes.

7. Employer Registrations – if the business has employees, the owner must usually make unemployment insurance contributions.

In many states, people in certain occupations must have licenses or occupational permits. Often, they have to pass state exams before they can get these permits and conduct business. States usually require licensing for auto mechanics, plumbers, electricians, building contractors, collection agents, insurance agents, real estate brokers, repossessors, and anyone who provides personal services (i.e., barbers, cosmetologists, doctors and nurses). Contact your state government offices to get a complete list of occupations that require licensing.

For more information see:
State Licenses & Permits” on;
Starting an Online Business: Licensing Requirements” on; or
Business Licenses and Permits” on

Local Requirements

Your local licensing requirements will vary. Some examples include the following:

  • You may need a zoning compliance permit before you can open for business. Make sure the space you own or lease is properly zoned for the specific type of business you select.
  • You may need a special license if you’re conducting business out of your house, a beauty salon for example.
  • Are you planning on remodeling your space? You may need to get a permit, so you will want to check the building codes first.

Where do you go to get a license?
The best place to start is your local city hall or courthouse. See the city clerk, who should be able to direct you. You can also phone the city or county clerk’s office with questions, or look in your local phone book under municipal government offices. Run an online search on Google or Yahoo to find the Web site for your local city hall.

For more information see “Business License & Permits” on

Please Note: To help you identify the specific licenses or permits your business may need, the SBA has a tool called Permit Me. Simply enter your zip code and business type to view a list of the licenses or permits you’ll need, together with information and links to the application process.


Business Plan Resources

The SBA’s (US Small Business AdministrationSmall Business Learning Center is full of amazing training files. It has online training courses, videos, and chats. I found the online course for How to Write a Business Plan to be extremely helpful.

SBA also has a series of business planning tutorial videos by Tim Berry.  Tim Berry is the Founder and Chairman of Palo Alto Software and He is the author of business plan software Business Plan Pro and and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

Another item on SBA’s site that I like is Creating a Business Plan, which is found under Starting a Business in the Starting & Managing a Business section. There is a link to the SBA’s Build Your Business Plan tool – a step-by-step guide to help you create your business plan.

SCORE has some Templates and Tools that will serve you well. There are one or two, of course, related to Business Plans. For example, here are 5 Tips on Creating a Great Business Plan, brought to you by SCORE Mentors:

  • Take the long view and do long-term planning. Map out where you want to be five years from now and how you plan to get there.
  • Write the plan yourself. You will learn more about your business by doing so.
  • Think of your plan as a living document. Review it regularly to make sure you are on track or to adjust it to market changes.
  • Share the plan with others who can help you get where you want to go—such as lenders, key employees and advisors.
  • Understand that you might pay a price in the short run to obtain long-term business growth and health.

SCORE has a gallery of Business Plan Templates as well as templates of Financial Statements. They also have Online Workshops, such as Quick Start Business Plan.

Next time we will talk about how to obtain business licenses and permits.

What is a molehill anyway?

I have come to the conclusion that if I spent as much time writing my business plan as I do worrying about it or researching about it, I would have finished it weeks ago. I’m pretty sure I’m making a mountain out of a molehill. So, to assist you (and me) I decided to summarize the basic requirements of a business plan. It’s a long post so get your reading glasses along with a glass of your favorite beverage and dig in!

Most business plans are organized into five major categories:

  1. Executive Summary
  2. Company Description
  3. Products & Services
  4. Marketing & Sales Plan
  5. Financial Information

Let’s discuss each category individually.

The first category is the Executive Summary. This may be the most important part of your business plan. Most experts agree, however, that this should be done last after you have completed all the other categories in your business plan. The executive summary is your chance to shine and show people that you are ready to get your business off the ground. As a summary section you will give a quick picture of your experience, training, and plans for success.

The second category is the Company Description. This is where you give a profile of your company by explaining your business and what niche you are serving. State where you are located and under what type of legal format your company operates, such a sole proprietorship, Incorporated, or LLC. You should then list details such as:

  • Size
  • Management structure
  • Number of employees
  • Your target market and unique selling position
  • Expertise level
  • Scope of work
  • Hours of operation

Next, list the duties and responsibilities of management/key staff/consultants, if any. Describe what your company does and what makes it unique. Describe your ideal target customer including:

  • Location
  • Numbers
  • Age, marital status, income, number of children, educational level
  • State whether or not their numbers are growing or declining
  • Trends affecting your customer demographic
  • What they spend on products or services similar to yours
  • Who they purchase these products or services from
  • Where and how do they buy them

Profile your main competition:

  • Who are they
  • Where they located
  • What’s their size
  • Discuss what market segments they serve
  • Give a rough estimate of their sales
  • Approximately how long have they been in business
  • Sketch out their strengths and weaknesses
  • State whether they are growing or declining
  • What is their market share
  • Where will you fit in
  • How will you overcome any competitive disadvantages

The next category is Product & Services. In this section describe your products and services. Discuss how your products and services are unique and better than your competitors. Explain how you see your products and services changing over time and your business growing. Detail the level of customer demand for your products and services now and project where demand will be over the next 2 to 5 years.

Category four is Marketing & Sales. The main purpose of this section is to discuss how you will reach customers. We will expand on who is the ideal target customer we discussed in Category two by answering questions such as:

  1. Who are my customers and potential customers?
  2. What kind of people are they?
  3. Where do they live?
  4. Can and will they buy?
  5. Am I offering the kinds of goods or services they want at the best price, at the best time, in the right amounts?
  6. Are my prices consistent with what buyers see as the product’s value?
  7. How does my business compare with my competitors?

A successful marketing strategy will typically include the four Ps – price, promotion, products, and place – to reflect the wants and desires of consumers in your target market. A product is an item that satisfies what consumer needs or wants. Price is the amount a consumer pays for the product. Promotion is all of the methods of communication and a marketer may used to provide information about the product. Place – or distribution – refers to the providing the product at a place that is convenient for consumers to access.

For sales strategy, provide a summary of the people most likely to purchase your products or services. Address the most urgent need they would be seeking to meet or which major benefits would attract them. Discuss where and how you will sell your products and services. Will you sell only online? Will you have a brick-and-mortar location?

The final category is Financial Information. This section should include financial statements and forecasts for the business. The financial structure of your business is usually described in three financial statements: the balance statement, income statement, and cash flow statement. As a new business you should include estimated start-up costs, a projected balance sheet, a projected income statement, and a projected cash flow statement for 12 months. All statements should be projected one year forward.

Please remember that I am sharing only the basics. However, I have discovered some wonderful resources that I will discuss and post next time. 

And now for something a bit different …

I am still working on my business plan but wanted to stop by and say hello.

I have a confession – I love to surf the internet! I love to learn about all sorts of things and I thought I’d share a couple with you.

Yesterday I found a post called “46 Ways to Start a Business With No Money.” Forty-six is the highest number I’ve ever seen in a how to start a business list. The post is a few years old but it is definitely worth checking out. The author is Brian Armstrong who is the Co-founder and CEO of He is also the author of “Breaking Free” a book that journals his experience starting a business. I found myself nodding in agreement as I read the first few chapters.



The Breaking Free eBook is available at no charge and is Free to download.

Breaking Free is also available in paperback and can be purchased from


Another book I learned about is also a bit different. It was first published in 1937 and remains a perennial best-seller after 70 years (BusinessWeek Magazine’s Best-Seller List ranked it as the sixth best-selling paperback business book 70 years after it was first published). This book was written by Napoleon Hill (no relation) and the title is “Think and Grow Rich.”

It is fascinating reading! This is from the book description:

“Think and Grow Rich is a motivational personal development and self-help book written by Napoleon Hill and inspired by a suggestion from Scottish-American businessman Andrew Carnegie … The text of Think and Grow Rich is founded on Hill’s earlier work The Law of Success, the result of more than twenty years of research based on Hill’s close association with a large number of individuals who achieved great wealth during their lifetimes. At Andrew Carnegie’s bidding, Hill studied the characteristics of these achievers and developed 16 “laws” of success intended to be applied by anybody to achieve success. Think and Grow Rich condenses these laws further and provides the reader with 13 principles in the form of a philosophy of personal achievement.”

Is a Business Plan Really Necessary?

The short answer is “yes” and the long answer is “yes but, depending on the size and niche of your business, it does not always need to be a long dissertation.”

There are many articles and websites covering this topic so I am only going to try to help you navigate through the maze. Two great sources of information are (the official website for the U.S. Small Business Administration) and  (business mentoring that is free and confidential).

I have to admit that when I hear the phrase ‘business plan’ I do not get warm, fuzzy feelings. Quite the opposite, I start to get tense and a little nervous. Why? Because it sounds like punishment – you have to write a business plan.

So the first step is to realize that it is in your best interest to write a business plan. It will help you to define your goals and the steps necessary to achieve your goals. It will force you to spend time thinking about the future and how to get where you want to go!

Ken Yancey, the CEO of SCORE since 1993, wrote a blog post last December entitled “A Small Business Plan for the Future” that gives a great response to our initial question: Is a business plan really necessary?

The SBA website has a Business Plan Tool to help you get started. SCORE has a Business Plan Template for a Startup Business that I just downloaded. I want to complete the steps in the SBA’s Business Plan Tool before I start on the actual plan. I hope to do that some time over the next few days. I’ll let you know how it goes.

What Business Structure is Right for You?

It’s a reasonable question – but not easy to answer. Entire books have been written on the subject. I am going to give you a basic introduction with links to resources that will give you more information. You should meet with your attorney or accountant to make the final decision.


Selecting the legal structure of your business is a big deal but you can change the business structure whenever you think it is appropriate to do so. In other words, you can start out as a sole proprietor and change to LLC later. Things to consider when deciding the legal structure of your business include the start-up cost, cost of operations, taxes and liability.

Here’s an overview of the basic legal structures you can use for your business:

Sole Proprietorship

A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.


A partnership is a single business where two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor or skill. In return, each partner shares in the profits and losses of the business.

Because partnerships entail more than one person in the decision-making process, it’s important to discuss a wide variety of issues up front and develop a legal partnership agreement. This agreement should document how future business decisions will be made, including how the partners will divide profits, resolve disputes, change ownership and how to dissolve the partnership. Although partnership agreements are not legally required, they are strongly recommended and it is considered extremely risky to operate without one.

Limited Liability Company

A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

The “owners” of a LLC are referred to as “members.” Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs.

Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all profits and losses are “passed through” the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.


A corporation (sometimes referred to as a C corporation) is an independent legal entity owned by shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs.

Corporations are more complex than other business structures because they tend to have costly administrative fees and complex tax and legal requirements. Because of these issues, corporations are generally suggested for established, larger companies with multiple employees.

My jewelry business is a sole proprietorship and I am leaning that way for the consulting business. I plan to find and meet with a business attorney soon.

Next time we’ll discuss writing a business plan.

[Photo Credit:]

It’s Independence Day!

I hope you are having a happy and safe Fourth of July holiday. I’m happy because I’m working towards my own independence day. Why are you happy today?

I thought I would give you a little background information so you have a better idea where I am coming from. I have one business already. I started it in 2003. I make and sell beaded jewelry, mostly at Christmas craft shows. The name of my business is “Sweet Creations – Jewelry by Candy” and it violates many of the principles of naming a business. For example, it’s too long – is a mouthful! Also, it’s too specific. What if I decided to create something other than jewelry?

You may be wondering why I didn’t go with just “Sweet Creations” or “Jewelry by Candy” First, I found out that “Sweet Creations” was registered to a bakery somewhere in Florida when I tried to register it on the Fictitious name website. Second, I never thought of going with “Jewelry by Candy” until a minute ago!! So, wait here while I go look to see if that’s registered to anyone else in Florida … No it isn’t but there were 21 businesses registered that started with “Jewelry by …”

I decided to use my initials in naming any new endeavors. And I came up with a logo. It stems from the way I have initialed things since I was a teenager. Here’s my logo for the consulting business I’m working on:


Next time we’ll investigate what’s the right legal structure for your new business. There are four types of business structures — sole proprietorship, partnership, limited liability company or corporation — each has its own advantages and disadvantages.

What’s in a Name?

There are so many things to consider when naming your business that it can make your head spin. If you use Google and search “how to pick a name for your business” you will see hundreds of websites as well as lists suggesting related searches.

I have searched a number of small business websites and finally found one that explains the process simply so it makes sense. Darrell Zahorsky writes for – Small Business Information and he wrote an article entitled, “The 10 Commandments of a Great Business Name.” Be sure to read the entire article but for now here is the list:

1. Take Naming Seriously.
2. Avoid Word Play Dangers.
3. Don’t be an IBM.
4. Be Focused. 
5. Stay Out of Court.
6. Think Beyond Local.
7. Avoid ME Inc.
8. Ask Others to Spell it.
9. Be Web Friendly.
10. Check Availability.

Once you have decided on the name of your business you will have to register it with local, state, or federal government — especially if it’s considered fictitious. NOLO – Law for all has a good article on “How to Register Your Business Name.”

If your business doesn’t use your legal name as part of its business name you must comply with fictitious or assumed business name requirements in most states.

States like to keep track of fictitious business names in order to prevent confusion between businesses that use the same name and to give customers a quick way to determine the owner of a company. This allows customers to easily contact the owners with a complaint, etc.

If you are interested in following along with me on my journey, please subscribe to my posts. Next, we’ll talk more about the steps necessary to register your business.

Today I Started a New Journey

For as long as I can remember I have wanted to work for myself. Instead I have spent close to 30 years working as a  Research Administrator in Psychiatric Research. The story of how I got there is for another time. Today I want to talk about the future and getting on the right path.

Starting today I am actively working towards getting my consulting business up and running. I will be blogging about the trials and tribulations of starting an online business. I have learned quite a bit over the past 6-8 months that you may need to know. I have made mistakes that I want you to avoid. But I have also not found out about many topics that are crucial – such as getting a license, registering your business, taxes, etc.

If you are interested in following along with me on my journey, please subscribe to my posts. Tomorrow we’ll talk about registering Fictitious names, which is required in the state of Florida. So start thinking about a name for your business.