Why You Need a Business License and How to Get One

2 min readFeb 16, 2021

When starting your business there are lots of steps you need to take. One of the earliest and most important is getting your business license to operate your business.

Once you start collecting customers and generating revenue, it is highly recommended to make sure you acquire a business license in the city you are operating in.

What is a business license?

A business license is a legal document allowing you to operate your business within a specific city.

Why you need one

When you file your taxes as a business, the IRS will contact the city you are operating in to make sure you have a license to do business there.

What are some caveats to having a business license?

Some states don’t require you to have a general business license…like in Texas. You should always double-check to make sure the city doesn’t require you to have one, even if the state says you don’t need one. Business licenses are issued on the city level.

Depending on the type of business you are running, special business licenses might be required. For example, if you work in construction or cosmetology, these require special types of business licenses.

How to find a business license in your city

You would go to your local cities government website and search for business licenses to see the requirements and rules to operate a business in that city.

We googled some places entrepreneurs like to live aggregated a few of them for you here (in no particular order):