Obtain Needed Permits and Licenses
PERMITS AND LICENSES
This avenue is cut and dry. What does your city/state say you need in order to operate? How much will this cost and the primary need of adding it to your budget. The costs may be higher than expected, however the investment of making sure you are up and running a business that won’t be shut down due to paperwork.
This is another area where many would-be home business owners feel overwhelmed, but it’s not hard or complicated. In fact, most, if not all, of these issues can be taken care of online.
There are several types of permits or licenses you may need, including:
Business License: Most cities or counties require a business license. Odds are your city or county’s official website has information for businesses including permits and licenses. If not, you can call or visit your local city or county’s government office for information and details.
Sales Tax Permit: If you sell tangible goods (stuff you can hold in your hand), and your state charges sale tax, you’ll need to collect and pay sales tax on your items. Check your state’s tax or comptroller’s office online for information. You’ll probably be able to sign up for the permit online.
Occupational Permit or License: Depending on the business you run, you may need an occupational permit. These are supplied by states that regulate certain businesses. For example, you may need a license to run a day care out of your home. Typical regulated businesses include day and elder care, financial businesses, grooming (i.e. hair stylists or pet grooming), and food and beverage creation and sales. Check your state’s website for information on occupational licenses.
Fictitious Name Statement (Doing Business As or Assumed Name): If your business name is something other than your given name, your city or county may ask you to file a fictitious name statement, sometimes called doing business as or assumed name statement to let residents of your area know about your business. This is often done through your local city or county clerk’s office.
Employer Identification Number: This isn’t required in all business types, but it’s free and can help keep your business separate from your personal life. If you have employees, you’ll definitely need one. Visit the IRS online for details on whether or not you need Employer Identification Number (EIN) and how to get one. One advantage to getting one, is the ability to use your businesses number, instead of your social security number, in your business-related activities (i.e. filling out a W-9 for freelance or affiliate businesses) that require a federal ID number.
Business Bank Account: Once all this is set up, it’s time to open a business bank account. Even if you run your business as a sole proprietor, you’ll want a separate account for business. The IRS is a stickler for not commingling personal and business funds.