DEPENDING ON THE TYPE of business you are starting, you may be required to obtain local, county, State or Federal licensing. Since heavy fines are usually associated with conducting a business without proper licenses and permits, it is important to determine which license will be required before you start conducting business.

In general, most small and home-based businesses will only require a local business license or permit. It’s important to conduct research and get positive answers, however, because to be held up by red tape or fees when you’re trying to launch a new business is the last thing you want.

The good news is that determining what your local licensing requirements are is a simple process. Simply call or visit your city or county government offices (or website) for information about business licensing requirements. These offices are typically found in the courthouse. Nearly all businesses will require at least a county or city license to operate. The license is easy to obtain and normally only requires a short visit to the local courthouse. Fees, if any, are small. The exception to this rule is a liquor license. Liquor licenses can be very expensive (over $100,000) and the penalties and fees for serving alcohol without a license can cost more than the license itself and have incarceration rolled up with it. In short, don’t serve alcohol without a license; it’s not worth it. Enough said.

If you intend to start a home-based business, ensure that, aside from acquiring a business license, that you check local zoning requirements (this can typically also be accomplished at the courthouse) as well as any property covenants.  Zoning requirements regulate how property can be used and in some cases, some activities may not be allowed in your area.

Some businesses may also require a State license. Examples include attorneys, barbers, contractors, dentists, most businesses serving food, and social workers. Each State has an agency dealing with these types of businesses. You can determine if your business requires a State license by contacting your local government offices or visiting their website. They should be able to give you information as to whether your business will require State licensing. In some cases, these licenses can be expensive.

For a very few number of businesses, Federal licensing is required. Examples would be a business that is engaged in providing investment advice or dealing with firearms. In general, Federal licensing is required if the business is highly regulated by the government. It is best to consult legal counsel in these cases.

Each State has different business licensing requirements. A good source of State specific information is the Internet, specifically your local, county, State, or federal government websites. Not only will they provide answers to all the questions you might have, they will have contact information and downloadable documents with tutorials so that you can begin the process immediately at home. In most cases, you will only have to show up and sign the document. It’s even possible, in some cases, that you can complete the entire process at home via the Internet or U.S Mail.