When you're starting a new side hustle or second job, the last thing you want to worry about is licenses and permits. Unfortunately, in today's world, it's not as simple as just picking up a shovel and starting to dig. Every industry has its own set of rules and regulations, and it's important to make sure you are following them. In this article, we'll cover the basics of business licensing and give some examples of jobs and careers that require licenses in different countries. Stay safe and legal by knowing what is required of you.
Let's address the inevitable first. No matter if you start your side hustle as a sole proprietor, corporation or LLC, all businesses need a business license. The only thing that varys is the agencies you need licenses and permits from. We differentiate between Federal Licenses And Permits and State Licenses And Permits. You either need one or the other or a combination of them. And then there are general business licenses and industry specific business licenses. Let's get this on step by step.
Federal Business Licenses
Some businesses are regulated by federal agencies. If you want to get into one of these, you need to get a business license and permit from the according department, administration, board, service, commission or bureau. Here are the types of business activities that need federal licenses and permits:
Agriculture: You need a license from the United States Department of Agriculture if you want to deal in meat, poultry, eggs, or dairy products. This includes slaughtering, packing, and processing these items. You will also need a permit if you are transporting these products interstate.
Alcohol: The manufacture, importation, exportation, sale, and transportation of alcohol is regulated by the Alcohol and Tobacco Tax and Trade Bureau. This includes beer, wine, and liquor. You will need a license or permit if you are involved in any step of this process.
Aviation: The Federal Aviation Administration regulates the aviation industry. If you want to get into this business, you will need to get a license or permit. This includes commercial and private pilots, aircraft mechanics, and air traffic controllers.
Fish and Wildlife: The United States Fish and Wildlife Service regulates the fishing, hunting, and trapping industries. If you want to get into this business, you will need a license or permit. This includes guides, outfitters, and charter captains.
Firearms: The Bureau of Alcohol, Tobacco, Firearms and Explosives regulates the firearms industry. If you want to get into this business, you will need a license or permit. This includes gunsmiths, manufacturers, and dealers.
Commercial fisheries: The National Oceanic and Atmospheric Administration Fisheries Service regulates the commercial fishing industry. If you want to get into this business, you will need a permit. This includes charter boats, fish farms, and fish processors.
Maritime Transport: The Federal Maritime Commission regulates the maritime transport industry. If you want to get into this business and transport cargo by sea, you will need a license or permit.
Mining: The Bureau of Safety and Environmental Enforcement regulates the mining industry. If you want to search for gas, oil or mineral resources on federal lands, you need to contact this federal bureau.
Nuclear Energy: The Nuclear Regulatory Commission regulates the nuclear energy industry. If you want to get into this business, you will need a license or permit. This includes power plants and uranium mines.
Radio and TV broadcasting: Starting your own TV channel? The Federal Communications Commission regulates the radio and television broadcasting industry. If you want to get into this business, you will need a federal license as well.
Transport and Logistics: The U.S. Department of Transportation regulates the transport and logistics industry. If your business operates commercial vehicles, you will need to get a license or permit from this federal agency. This includes trucking companies, bus companies, and taxi services.
Ok, that was a bit hard to swallow, I guess. But it needed to be said, though you probably don't want to dig for oil as a side job. For “normal side gigs” a state license and permit should be enough in most cases. So let's talk about them now.
State Business Licenses
In addition to federal licenses and permits or instead of them, most businesses need state licenses and permits. The requirements vary from state to state, so you will need to check with your state's licensing board or agency. Here are some examples of businesses that need state licenses:
– Contractors
– Electricians
– Landscapers
– Plumbers
– Hairdressers and barbers
– Restaurants
– Retail stores and online retailers
etc.
These are just a few examples, but as you can see, most businesses need some kind of state license or permit to operate legally. Please research your state, county and city regulations to see which kind of business license you need. This is too big of a topic to discuss in one article. We may drop a series of articles about specific state business licenses at some point in the future. But right now, please refer to your state's website to find out what permits and licenses you need.
Where do I get a business license for my side work?
After you have determined which licenses and permits you need, the next step is to actually get them. The best place to start is with your local city or county clerk's office. They will be able to tell you which licenses and permits you need and how to go about getting them.
In some cases, you can apply for a business license online. For example, the city of Las Vegas offers an online business license application. You can also find many state business license applications online.
Another option is to use a service like Incfile, which can help you with the process of incorporating your business and getting your business licenses and permits.
How do I get a business license for my side hustle?
After you have decided from where to operate your business, research your state and city regulations. You can use the Small Business Administration's website for further information.
You need to have your company's Federal Tax ID Number (EIN). If you plan to proceed as a sole proprietor you can use your SSN for tax purposes.
Make sure to find out if a business license is enough or if you need a specific permit alongside.
Don't forget the fee for obtaining a business license. This fee can range from $25 to a few hundred dollars, depending on the state and business type.
And that's it! You are now ready to start your side hustle with a business license. Remember to stay up-to-date on any changes in regulations so you can keep your business compliant. Do you have any questions about business licenses or permits? Leave a comment below and we will do our best to answer them.
Does my business license expire?
Yes, most business licenses need to be renewed periodically, usually once a year. The frequency and cost of renewing your license will depend on the type of business you have and the state in which you operate. For example, here in Nevada, businesses must renew their licenses every year, while in California, businesses must renew them every two years.
It's important to keep up with the renewal process to avoid any penalties or fines. Many states will send out reminders before your license expires, but it's always a good idea to set a reminder in your own calendar as well.
What happens if I forget to get a business license for my side hustle?
If you forget to get a business license for your side hustle and you get caught, you could be facing some serious penalties. Most likely you'll need to pay a fine, and in some cases, you could even be required to shut down your business, temporarily or permanently.
So, it's important to make sure you're compliant from the start. Do your research, get the proper licenses and permits, and renew them on time. It might seem like a lot of work upfront, but it's worth it to avoid any problems.
Do I need a business license if I'm just selling products from home?
In most cases, yes. If you're selling products from home, you'll need to get a business license. The same goes for if you're selling products online.
There are a few exceptions, though. If you're selling products that you made yourself, like homemade jams or crafts, you may not need a license. But if you're selling products that you didn't make yourself, like clothes or jewelry, you will need a license.
It's always best to check with your local city or county clerk's office to find out the specific requirements for your area.
Do I need a business license for my online store?
If you're selling products online, you will need a business license. Whether this business license is issued by your state, county or city depends on where you're located. In some cases, you may also need to get a permit in addition to your business license.
How much does it cost to get a business license?
The cost of a business license varies depending on the type of business you have and the state in which you operate. You can get the cheapest business license in Minneapolis, MN for as low as $15. On the other hand, Minneapolis, MN also has one of the most expensive business licenses that could cost more than $10,000.
If you need a business license for your side gig, you usually get away with a general business license that costs between $25 and $200. However, there are some businesses or professions that require a specific permit in addition to a business license. These permits can cost hundreds or even thousands of dollars.
To find out how much your business license will cost, contact your local city or county clerk's office. They will be able to give you an estimate based on the type of business you have.
Do I need a business license to be a freelancer?
The requirements for obtaining a business license depend on the services offered. Graphic designers, for example, do not generally require a business license if they operate under their names and report company profits as personal income. However, cosmetology is a more specialized field, and freelancers must be licensed. There are many local rules that a small business must follow, and licensing is one of them. Because regulations can be federal, state, and local, requirements will also vary by location. Even if a particular trade license isn't needed in Philadelphia, a freelancer will need a Business Privilege License there. However, in Washington D.C., where only specialized services are offered, a freelancer just needs a general business license if she has registered her company and gotten a Federal Employer Identification Number. To figure out what requirements your services must meet in your region, use the U.S. Small Business Administration's “Permit Me” tool, which offers information depending on zip code and sector.
Do I need a business license to be an Uber or Lyft driver?
If you're driving for a ride-sharing service like Uber or Lyft, you will need a business license. The requirements vary from state to state, but in most cases, you'll need to get a chauffeur's license or commercial driver's license (CDL). You may also need to get additional insurance coverage beyond what your personal auto insurance policy provides.
Companies like Uber or Lyft are great partners and they help their drivers obtain the necessary licenses and insurance. However, it's important to remember that you are an independent contractor, not an employee. This means that you are responsible for your own taxes and expenses.
Do I need a business license to be a pet sitter?
If you're running a pet sitting business, you will need to get registered with the state. But not all states require a business license for pet sitters. Again, please make sure to check your state's website to see what the requirements are.
Some states may require you to get a general business license, while others may have specific licenses for pet sitting businesses. For example, in Florida, you need to get a Pet Services License from the Florida Division of Corporations. The cost of this license is $60 per year (in the year of publishing this article).
Takeaways
Depending on the type of business you have, a general business license may be all you need to operate legally. But in some cases, you may need to get a specific permit or license.
If you're not sure whether your business requires a license, the best way to find out is to contact your local city or county clerk's office. They will be able to tell you what licenses and permits are required in your area.
In general, it's a good idea to get a business license even if you're not required to by law. This will give your business a sense of legitimacy and help you avoid any legal trouble down the road.
Doing some research and getting the proper licenses and permits can be a pain, but it's worth it to make sure your business is operating legally. After all, no one wants to get shut down by the authorities.
Have you ever started a side hustle? What was your experience with getting a business license? Let us know in the comments below. We also love to hear your story. So if you've taken a side hustle into a full-income business, please share your experiences, tips and motivational story with our other readers. At the end of the day, we can all benefit from each other's success.
