How to Get a Business License

To get a business license, you register your business entity with your state, obtain an EIN from the IRS, then apply for the specific licenses and permits your industry and location require — usually a general local business license (or "business tax receipt") from your city or county, plus any state professional or regulatory licenses that apply to your work. Most businesses can complete the core steps in one to four weeks, and total cost typically runs from under $100 to several hundred dollars for a simple local operation, with regulated industries (food, health, contracting, alcohol, childcare) costing more and taking longer.

There is no single national "business license" in the United States. What people call "getting a business license" is really a stack of registrations at three levels — federal, state, and local — and the exact combination depends on what you sell, where you operate, and how your business is structured. This guide walks the stack in the order that actually works, so you do not pay for a permit before you have the entity and EIN it references.

The three levels of licensing you actually need

"Business license" is an umbrella term. In practice you are assembling requirements from up to three government levels, and skipping a level is the most common reason an application gets bounced back.

• Federal: Most businesses do not need a federal license. You need one only if you operate in a federally regulated activity — selling alcohol, tobacco, or firearms; commercial fishing; aviation; broadcasting; transporting goods across state lines; or handling agriculture, meat, or certain wildlife. The relevant federal agency (ATF, USDA, FCC, FAA, DOT, etc.) issues these.
• State: This is where you register your legal entity (LLC, corporation), obtain a state tax or seller's permit if you sell taxable goods, and secure any professional or occupational license — contractors, cosmetologists, accountants, real estate agents, health providers, and many trades are licensed at the state level.
• Local (city and county): The general "business license" most owners picture. Many jurisdictions call it a business tax receipt, business tax certificate, or certificate of occupancy. This is what authorizes you to operate at your physical address, and it often triggers zoning, fire, and health inspections.

Your industry determines which boxes you check; your location determines who you check them with. Two identical bakeries in different counties can face very different local permit lists.

Step-by-step: the correct order of operations

Sequence matters. Each step produces a document or number the next step asks for. Do them out of order and you will re-file.

1. Choose your business structure. Sole proprietorship, partnership, LLC, S-corp, or C-corp. This decides how you register, how you are taxed, and your personal liability. Most small operators choose an LLC for liability protection with simple taxes.
2. Name and register the entity. Check name availability with your Secretary of State, then file formation documents (Articles of Organization for an LLC). Sole proprietors operating under a name other than their own file a DBA ("doing business as") instead.
3. Get an EIN from the IRS. Free, online, issued immediately. You need it to open a business bank account, hire employees, and complete nearly every license application. Sole proprietors with no employees can sometimes use an SSN, but an EIN is still recommended.
4. Register for state and sales tax. If you sell taxable goods or certain services, apply for a seller's permit / sales tax license through your state's department of revenue.
5. Apply for state professional licenses. If your occupation is regulated, complete the licensing board's requirements — often exams, proof of insurance, and bonding.
6. Apply for the local business license / tax receipt. File with your city and/or county, pay the fee, and schedule any zoning, fire, or health inspections tied to your address.
7. Layer on special permits. Signage, health department, food handler, home-occupation, liquor, and building permits as your operation requires.

If you are still deciding how the business will be structured and financed, our guide to small business funding pairs well with this checklist — the entity you register here is the same one lenders and funders will underwrite later.

Realistic cost and timeline examples by business type

Fees vary widely by state and county, so treat the figures below as illustrative ranges, not quotes. Each row is a for example scenario to show how the licensing stack scales with regulation.

The pattern is consistent: the more your business touches public health, safety, or a regulated profession, the longer and more expensive the licensing path — and the more upfront cash you tie up before you earn a dollar.

How to find your exact requirements

Do not guess, and do not copy another owner's list — requirements are hyper-local. Use these authoritative sources in order:

• SBA license & permit lookup: The U.S. Small Business Administration lists federal requirements by activity and links out to state resources. Start here to confirm whether you need any federal license at all.
• Your Secretary of State: For entity registration, name search, and DBA filing.
• Your state department of revenue: For sales tax and seller's permits.
• Your state's professional licensing boards: Search "[your state] + [your profession] + license" to reach the actual board, not a third-party filing mill.
• Your city and county clerk or business tax office: For the local business license, zoning confirmation, and inspection scheduling.

A useful shortcut: call your county's business tax office directly and describe your exact operation and address. They will tell you which local permits apply and, often, which state registrations you must show first. Third-party "license service" companies can file for you, but they charge markups for forms you can complete yourself for free.

Decision framework: when to DIY vs. hire help

Not every business needs a lawyer or a filing service. Match the effort to the risk.

Handle it yourself when:

• You are a sole proprietor, freelancer, or single-member LLC in a low-regulation field (consulting, most online services, general retail).
• Your only requirements are entity registration, an EIN, and a local business tax receipt.
• You have no employees and operate from home or a simple leased space.

Get professional help (attorney, CPA, or licensed filing service) when:

• You are in a heavily regulated industry — food service, alcohol, healthcare, childcare, cannabis, contracting, or financial services.
• You have multiple owners, outside investors, or plan to raise capital and need the operating agreement and structure done right.
• You operate across multiple states and must register as a "foreign entity" in each.
• A misfiled license would shut you down or expose you to personal liability.

Avoid third-party filing mills when the task is genuinely a free government form (EIN, most DBAs, local tax receipts). Paying $200+ for a $0 EIN is the classic first-time-owner mistake.

Keeping licenses current — the part owners forget

Getting licensed is not one-and-done. Most licenses expire and must be renewed, and lapsing one can carry fines or force a temporary shutdown.

• Renewal cycles: Local business tax receipts often renew annually; state professional licenses may run one to three years; sales tax permits may be perpetual or periodic. Track every expiration date in one calendar.
• Report changes: Moving locations, adding a service line, changing ownership, or hiring your first employee can each trigger new permits or amendments to existing ones.
• Maintain good standing: States can administratively dissolve an LLC that misses its annual report or franchise tax — which quietly invalidates the liability protection you paid for.
• Keep proof accessible: Lenders, funders, landlords, and insurers routinely ask for current licenses. Keep digital copies with your formation documents and EIN letter.

Funding the setup — and the working capital that follows

Licensing costs are front-loaded: you pay filing fees, deposits, inspections, bonds, and often several months of rent or buildout before revenue arrives. For a low-regulation business the total is manageable out of pocket. For a restaurant, salon, or contracting operation, the licensing-and-buildout gap is where many owners run short on cash.

Traditional bank loans and SBA loans are strong options for well-established borrowers, but they typically want two-plus years of history, strong credit, and weeks of underwriting — which does not help a business that is still getting licensed. Once you are operating and generating deposits, a revenue-based funding marketplace can be a faster bridge for working capital. These funders underwrite primarily on your bank deposits and revenue trend rather than credit score, which suits newer operators.

• Approval basis: bank deposits and revenue over credit history
• Credit: commonly available to FICO 500+
• Funding size: starting around $10,000
• Speed: decisions and funding often within 24-48 hours once statements are reviewed

Because repayment flexes with a share of your ongoing sales, it maps to cash flow rather than a fixed calendar — useful when revenue is still ramping after opening. It is not a fit for pre-revenue startups (you need deposits to underwrite), and no legitimate funder can "guarantee" approval; terms depend on your actual revenue. Compare it against a line of credit or term loan using our business funding guide before committing, and only borrow against revenue you can already see in your account.