Your local county, city, or town may have rules about what you must do before you can open a business. Typically, they enforce these rules via requiring a business license, a DBA (doing-business-as) registration, compliance with zoning laws, or a permit.
Even if you’re working from home or have an online business, your town probably considers you “located” there (because you physically work there), so you need to be aware of these requirements. If not, you may be surprised to get a bill (with interest and penalties) next year!
Licensing: Business licenses, if required in your area, may come from the state, county, or city. In California, for example, a business needs to obtain a license from its local town to operate a business, but in Nevada a business license is obtained from the state of Nevada. Local governments may track you down if you don’t obtain the license, because your business name and address will end up in various publicly available databases. It’s common for many business to not get a license, especially if it starts out as a side project and/or doesn’t have a physical location. Once you start making money, however, you will start to show up in government databases because you are paying taxes or doing other government filings. At that point, your local jurisdiction will probably send you a bill for back license fees owed (ow!).
Doing-Business-As: If you are operating a business with a different name than your legal name, then you need to register that trade name or doing-business-as (DBA) name, so the public isn’t confused. For example, if I decided to sell art under the name Chicken Soup Art, I would need to file a DBA registration on this name, so the public knows that the person/corporation behind Chicken Soup Art is me. This DBA registration may be done with your state or your county, depending upon your jurisdiction, and you’ll probably need it done before you can open up a bank account in your new business’ name.
Zoning: Your local jurisdiction may have restrictions on what can be done on any particular tract of land. For example, if a specific plot of land is zoned residential, then a jurisdiction may or may not allow residents to operate a business, or may only allow it with restrictions. For example, the business may only have workers who live in the house where the business is located, signage / noise / smells may be prohibited, or only two cars may be permitted to visit the premises at one time. If you’re running an online business from home, you may need a Home Occupation Permit and to comply with the local zoning rules for a home business.
Permits: Certain types of businesses may need special permits to operate in their specific jurisdiction. For example, in San Jose, California, a massage business will need a permit from the local police department, because they will want to ensure that it really is a legit massage business. Sometimes it is easier to relocate to a different location, than to deal with onerous local permit rules.
Would you like help navigating requirements in your area? Let’s chat!