What Licenses Are Needed to Start a Retail Business?
What licenses are needed to start a retail business depends on the city, county, and state laws in place and you may need multiple licenses.3 min read
What licenses are needed to start a retail business depends on the city, county, and state laws in place. Depending on the requirements, you may need multiple licenses.
Types of Licenses
Examples of some of the required licenses needed when starting a retail business include:
- Sales tax license.
- Resale license.
- City or county business license or permit.
- Alcohol license or permit.
- Doing Business As (DBA) registration.
- Sign permit.
- Fire department permit.
- Health department license.
Information About Starting a Retail Business
First, choose the type of business you want to operate. Choices include:
- Partnership (general or limited).
- Limited Liability Company (LLC).
- Sole proprietorship.
Each entity type has pros and cons as well as different fees and tax setups and consequences. Consult with an experienced professional, such as a business lawyer or an account to help you make the right decision.
Before going out an investing money in starting a retail business, one of the first things needed is a business plan, which includes a realistic budget. You'll also need to factor in how many employees the business will require and then budget their salaries, benefits, and taxes. When choosing a physical location for your retail business, it is important to check with the city or county about any zoning requirements and if the location you've selected allows retail operations.
You will also want to open a business checking account. You might also want to consider applying for credit under your business name. By doing so, you will establish a credit history for your business. This can make it easier to acquire funding such as loans or lines of credit in the future.
To help all employees be on the same page regarding policies and procedures, create an employee handbook. This ensures that everyone is treated in the same manner with the same rules, which can protect your business in the event an employee files a lawsuit.
You will need an Employee Identification Number (EIN) available through the IRS. Also known as a Federal Tax Identification Number, this is used to identify your business. It's free and can be registered online. Most vendors will require that you have an EIN before they'll do business with you.
How you register and where you register your business depends on the laws of your state. To find out what is needed for you to obtain a business license, start with your state's official website where you'll find resources to guide you through the process. For businesses within the city limits, you may need a business license. Contact your county or city clerk's office for information about what you need to start a business.