How to get a license for a home business

In times of crisis it is necessary to renew. The same thing happens when a person is starting out in the business world. Many take their first steps as entrepreneurs by starting a project from home. It can be anything you can imagine: selling homemade products for friends and family, selling cleaning products or even makeup. In all cases, obtaining a license for a home business can be very beneficial.

Some of them even design something innovative to stand out from the market and at the same time provide you with an effective solution to a common problem. Are you familiar with the cardboard band-aid they put on coffee at Starbucks so they don’t burn their fingers? Since most users are usually (at least initially) friends and family, it is understandable that, at this point, no one thinks of running a business let alone getting a business license.

However, it could be said that this would be the next step to be able to extend your audience and, of course, earn a little more money. Think that dealing with an unlicensed business can be problematic. If the authorities find out, they could penalize you with fines or perhaps take the case to court.

That is why the best thing would be that, if you are determined to start in the business world, you do it right from the beginning. After all, it’s easy obtain a license for a business at home: all you have to do is fill out a form and pay a small fee.

Do I need a business license for my home business?

Maybe yes. Most localities and counties require a business license to conduct certain businesses. Some counties still don’t require licenses (much less for home businesses), but all may in the future.

Although it might be annoying, you will see that, from the consumer’s point of view, a license is more than a requirement, because:

  • It lets you know that your local government knows what you’re doing and that, in the event of a product problem, they can hold you accountable. Also, if the authorities know about your product and have given you a license, it means that there is nothing wrong with what you sell, at least at first glance, right?
  • What entrepreneur, you will be contributing to the growth and development of your city or county. Think that your sales will also help the town to finance certain projects, such as a new school or that library that you have always wanted for your children.

Benefits of having a licensed home business

Of course, all the advantages of that license that you want to process will not go to the county or the city. You too could benefit from them.

And it is that, managing a duly registered domestic business will offer you peace of mind and the validation of others. That translates into more sales and, of course, less stress for you. But best of all, having that registered license will also allow you to access business loans, open your own business bank account, and more.

Note: Starting your banking relationship early could help you grow your business quickly. Think that the money you get from a loan, for example, could be used to condition your garage and turn it into a workshop, buy an industrial oven for your cupcakes or invest a little in advertising.

How to get a license for a home business?

On this subject, we have very good news for you! Obtaining a business license is usually easy, fast and, against all odds, affordable. To find out what requirements you need to apply for the license, you must visit the website of your county or city and click on the “small business” section. Maybe you’ll be so lucky that you can complete the entire registration online in a couple of minutes.

On the website of the United States Small Business Administration (US Small Business Administration) You will find valuable resources on types of license that are available in 50 states of the country and what are your requirements.

Yes indeed. We recommend that before applying for a business license, you have a commercial name for your business and determine what your operating structure.

Although the steps to obtain a license vary from state to state, they generally boil down to the following:

  1. Go online or call the office that handles business licenses in your city or county. Thus, you will be able to know what is the exact procedure that you must follow.
  2. Complete the form with the information of your home business. Be as specific as you can.
  3. Pay a filing fee. This fee is usually between $25 and $50. As you can see, it is quite affordable.
How to get a license for a home business

What other registrations or permissions might you need?

Obtaining a license for a home business, in some cases, is just the beginning, since (depending on the business line you are in) you may have to process other licenses and permits. To help you, we have created a list of the most popular business licenses and requirements on the market:

DBA

They stand for “Doing Business As”, that is, a fantasy name. If your company name is inelegant or too complex to do business with, you may need to apply for a fictitious name. This registration is easy to do and is usually subject to the payment of a fee that, in rare cases, exceeds $25.

occupational licenses

Many states across the country regulate certain types of businesses more than others. For example, you may need a permit to sell food, to work with people (in a nursery, to offer therapy, etc.) or to offer services related to the financial sector. Look for what type of occupational licenses there are in your state and there you will know if your commercial object falls under any of them.

Health Department Permit

If you sell homemade food or have jumped into the water with a catering business, you may need a permit from the Department of Health. In addition to the permit, you will have to comply with a series of health rules, such as storing the ingredients properly and separately from the groceries in your home.

Zoning Permit or Waiver

Zoning dictates what types of establishments can exist in different areas of your city, town, or county. In most cases, residential areas do not support businesses. However, this should not affect you from the start, since if your business does not need signage, does not increase traffic in the area or does not require the use of dangerous products, you could obtain an exemption. To get this exemption in your hands, contact your city or county zoning department to find out what paperwork you need to bring, if any. Do not miss this step! Think that non-compliance leads to the imposition of high fees and penalties that, in some cases, could lead your business to close its doors.

VAT taxes for the European Union

Do you export your goods to the European Union? Even if you have a small online store, when EU consumers buy your products, you must apply VAT to them and also pay it to the IRS. Our recommendation? Avoid this procedure by using a payment provider that collects and pays taxes for you, such as Amazon Pay or ClickBank.

Employer Identification Number (EIN or Employer Identification Number)

A EIN or FEIN It’s like the social security number for businesses. This number is completely free and you can get it online on the IRS (Internal Revenue Service) page in a couple of minutes.. Sole proprietorships don’t need one, but you may want to get one so you don’t have to use your social security number for business purposes. LLCs and other business structures typically file for an EIN, especially if they have employees.

Permission to work with sales tax

If your home business has one goal (selling tangible products) and your state is one of many that collects sales tax, you’ll need to obtain a license through your state’s tax comptroller or tax office. This will allow you to apply and file sales tax on your products and pay them online.

In short, how to get a license for a home business

There are many businesses you can start at home, from selling and arranging flowers to web design. You could even have a small online store, make cakes and birthday cakes and much more. Although you could do all this with the help of a website or through a social network, such as Facebook or Instagram, it is preferable that you process a commercial license.

Think that by doing so, you will be able to open your own business account and start a good relationship with the bank. This would allow you to apply for a business credit card or take out a loan to expand in the future. In addition, formalizing your business will give you a legal name and you will be able to promote your products or services with a DBA name, which is much more attractive to consumers.

Licensing is quick and easy, and in most cases no more than $50. Because of the type of business you run, you may have to go through a couple of extra steps, like getting an EIN for your business or paying sales tax. But don’t think about that! Just imagine the profits.

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