Working-alone guide

Licenses, permits and zoning for a home-based business

Licensing is rarely exciting, but it is one of the few start-up tasks that can stop work entirely if it is missed. The difficulty is that there is no single national list. Requirements come from several layers of government and depend on what you do and where. This guide explains how the SBA describes those layers, and gives a practical way to find your own answer.

Three layers of government

The SBA says most small businesses need a combination of licenses and permits from federal and state agencies, and that requirements and fees vary by business activity, location and government rules.

Federal. The SBA says activities regulated by a federal agency need a federal license or permit. Its list covers areas like alcohol, aviation, firearms, fishing and wildlife, broadcasting, mining and drilling on federal lands, nuclear energy, and certain agricultural imports. Most home-based service work does not fall in these categories, but check the SBA list if you sell regulated goods.

State. The SBA notes states tend to regulate a broader range of activities than the federal government. Professional and occupational licenses are commonly state-level.

County and city. The SBA says you may also need licenses from your county or city. It lists examples of activities commonly regulated at the local level: auctions, construction, dry cleaning, farming, plumbing, restaurants, retail and vending machines. Many localities also have a general business license or registration.

Zoning applies at home too

The SBA's location guidance is direct: you might have fewer zoning restrictions if you base your business at home, but zoning ordinances can still apply even to home-based businesses. Zoning is typically controlled locally, so the SBA suggests checking with your city planning department or similar office.

Local home-occupation rules often address issues like:

• client or customer visits;
• employees working at the home;
• signs;
• deliveries and parking;
• noise, storage and outdoor work;
• the share of the home used for business.

The specific limits differ in every place, so read your own local code rather than relying on a general rule.

Leases, condos and HOAs

Separate from public law, private agreements can restrict business use. Read:

• your lease, for clauses on business use, subletting or client visits;
• condo or homeowners association rules;
• your homeowner's or renter's insurance, since business use may not be covered; see business insurance types.

If something is unclear, ask in writing and keep the answer.

Step by step: finding your own requirements

1. Describe the work precisely. "Bookkeeping for small businesses from home, no client visits" gets a clearer answer than "consulting."
2. Start with your state. The SBA suggests your Secretary of State's website for finding required permits and licenses. Many states also have a business portal.
3. Check your occupation. If your work is a licensed profession in your state, find the licensing board.
4. Check your county and city. Search for the official business license page and home occupation rules.
5. Check sales tax. If you sell taxable goods or services, your state revenue department explains registration. Rules vary by state.
6. Record everything. Write down each office you checked, the date, and what it said.

The startup sheet on this site has space for one-time and recurring costs; add license fees there once you know them.

Renewals

The SBA notes some licenses and permits expire after a set period, and that it is often easier to renew than to apply for a new one. Put each renewal date in your calendar with a reminder a month ahead.

Routes in this directory

The directory lists self-employment routes with notes on what each typically involves. Some, such as food, childcare, trades and personal care, are much more likely to need specific permits or licenses than desk-based work. Treat each route's notes as a prompt to check, not as a statement of what your area requires.

When the answer is unclear

Call or email the office directly. Local small business development centers and SCORE mentors, both linked from the SBA, can also help you understand local requirements without charge.

Licensing rules change and differ in every jurisdiction. Check current official pages for your location before starting work.