How to Get a Business License

There's No Single "Business License"

A common misconception is that one license covers a business everywhere it operates. In practice, licensing works at three separate levels, federal, state, and local, and a specific business may need licenses at one, two, or all three, depending on its industry and location. Start by identifying which of these actually apply before assuming your business needs (or doesn't need) a license at all.

Federal Licenses Apply Only to Specific Industries

Most small businesses never need a federal license. The SBA lists the regulated activities that do: agriculture (import or transport of animals, plants, or related products across state lines, through the U.S. Department of Agriculture), alcoholic beverages (manufacturing, wholesale, import, or retail sale, through the Alcohol and Tobacco Tax and Trade Bureau), aviation (aircraft operation and maintenance, through the Federal Aviation Administration), firearms and explosives (manufacturing and sales, through the Bureau of Alcohol, Tobacco, Firearms and Explosives), fish and wildlife (import or export activities, through the U.S. Fish and Wildlife Service), commercial fisheries (through NOAA Fisheries), maritime transport (through the Federal Maritime Commission), mining and drilling on federal lands (through the Bureau of Safety and Environmental Enforcement), nuclear energy production (through the U.S. Nuclear Regulatory Commission), and broadcasting (radio, television, satellite, or cable, through the Federal Communications Commission). If your business doesn't fall into one of these categories, you likely don't need a federal license.

State Licenses and Permits

State regulation is broader than federal regulation and covers far more industries, commonly including construction, restaurants and food service, retail sales, cosmetology and other personal services, healthcare, and professional services like accounting or law. Each state sets its own requirements and issues licenses through different agencies, sometimes a licensing board for a specific profession, sometimes the state's department of revenue for something like a sales tax permit. Check your own state's Secretary of State or licensing portal for the specific requirements that apply to your industry, since there's no single federal list covering state-level rules.

Local City and County Licenses

Many cities and counties require a general business license to operate within their jurisdiction, regardless of industry, and some add industry-specific permits on top, like a health permit for food service or a sign permit for storefront signage. A home-based business is not automatically exempt; some localities still require a home occupation permit even if you never see customers at the property. Contact your city or county clerk's office directly, since requirements and fees differ significantly even between neighboring jurisdictions.

How to Find What Applies to Your Business

Start with your state's official business portal or Secretary of State website, which often lists state-level licensing requirements by industry or links to the agencies that do. From there, check your city or county government's website for local requirements, and if your industry is one of the federally regulated categories above, go directly to that federal agency's licensing page. The SBA's own licenses and permits guidance is a good starting point for understanding which of these levels is likely to apply.

Apply Before You Open, Not After

Most jurisdictions expect a business to hold any required license before opening to the public or making a sale, not after. Operating without a required license can lead to fines or an order to stop operating until the license is obtained, so build the time to apply and receive approval into your launch timeline.

Keep Track of Renewals

Some licenses are one-time, but many state and local licenses renew annually or on another fixed schedule, often with their own fee. Keep a simple list of every license your business holds, along with its renewal date, so a lapse doesn't happen simply because a deadline passed unnoticed.

Licensing Applies Regardless of Business Structure

Forming an LLC or corporation does not replace any license your industry or location requires; entity formation and licensing are separate processes handled by different agencies. A properly formed LLC can still be operating illegally if it's missing a required license.

Online and Home-Based Businesses Aren't Automatically Exempt

It's easy to assume a home-based or purely online business skips local licensing, but many cities still require a home occupation permit or a general business license based on where the business is legally based, not just where customers are located. Confirm with your specific city or county rather than assuming an online business is exempt.

Operating in Multiple Locations Multiplies the Checklist

If you operate in more than one city, county, or state, confirm licensing requirements in each location separately, since a license obtained in one jurisdiction generally doesn't cover another. This is especially common for contractors, delivery-based businesses, and multi-location retail.

This Is Not Legal Advice

Which specific licenses apply to a business depends on its industry, structure, and every location where it operates, and requirements change over time. Confirm current requirements directly with the relevant federal agency, your state's licensing agency, and your local city or county clerk.

Build License Costs Into Your Startup Budget

License and permit fees vary widely by industry and location and can add up alongside your state formation fee. Research the specific licenses your business needs and their fees before finalizing your startup budget, rather than discovering them after you've already committed to other costs.