Across the U.S., there are hundreds of thousands of local, county, municipal, township, and special district governments, each with its own individual business license and permit requirements. Meeting the rigors and challenges of business license compliance can mean tracking down deadlines and spending your valuable hours researching application requirements and corresponding with any number of federal, state, and regional offices. It can be a tricky process to navigate, especially if you have never applied for a business license before.
We’ve outlined eight common challenges we’ve faced when obtaining and renewing business licenses, as well as some ways to solve them.
Challenges with Researching Business Licenses
What business licenses do I need? How do I begin my search?
One of the first challenges businesses encounter when trying to apply for a business license is just knowing where and how to start their search to figure out what business licenses they need. Business licensure is complex and is going to be highly variable based on a number of factors, so it’s understandable that you might not know where to begin.
Sometimes it’s even difficult to understand who governs your license requirements. You might have a state business licensing requirement. Sometimes, in states like Pennsylvania, you might have city or township requirements that you have to navigate.
As a result, where you need to apply for a business license is not always straightforward. For example, you might have a physical location and the challenge is does my location fall within an unincorporated or incorporated area within a specific city. There may be an instance where you do business in Chicago, Illinois but you technically fall outside of the city limits of Chicago, so then you might fall under Cobb County’s jurisdiction and will need file there.
Solution:
Start by researching online who oversees business licensure in your jurisdiction. Begin at the state level and note any requirements they have, and work your way down to county and municipality level, repeating this process as necessary.
State Secretaries of State are often good places to begin your search, but will vary from state to state. For example, Florida has a separate Department of Business and Professional Regulation that issues most business licenses. Also, don’t be afraid to pick up the phone. You may also need to contact your state or local municipality directly to see what is required, if it is not listed online.
Are there industry-specific business licenses?
Adding to the complexity around business licenses is the fact that licensure requirements will not only vary from jurisdiction to jurisdiction, but by industry. Specific industries will also often require a business license. For some industries, such as accounting or insurance, the need for these industry-specific licenses are well-documented. However, for others, understanding when and where industry-specific licenses apply and who governs it can be less clear cut.
For example, as a contractor, how do I know that if I want to demolish and erect a building, are there a lot of places where you need Class A contracting licenses?
Additionally, in some cases these licenses are managed and issued through a professional association or organization rather than directly by the state.
Solution:
Knowing what industries often require business licenses can help narrow your search. Licenses are often required for:
- Insurance
- Banking
- Building & Construction
- Real Estate
- Hospitality
- Retail
- Industrial
- Architecture & Surveying
- Accountancy
But you should always do you due diligence and research if a license is required for your industry in your jurisdiction, even if it doesn’t appear on the above list. You can often find industry requirements on both state professional association website and state and municipal websites.
How do we find time to apply for business licenses?
Business owners and managers are often wearing many hats. Researching what permits and licenses are required for your business is likely one of many items on your to-do list. So often, just finding the time to figure out what you need is incredibly challenging.
Solution:
Remember that you don’t have to research everything in one go. You can research as you have time. However, it is important to remember that obtaining business licenses can take several weeks or even months, so be sure to leave ample time for the application and review process. As another alternative, you can use a business license service like CSC to handle the research and filing process for you.
Business License Filing Challenges
Where do I send the business license application?
Once you identify what the requirements are for obtaining a business license, the next logical question is how do you file your application? Specifically you might wonder where to send it. In your research, you should have identified which agency or jurisdiction oversees your licensure and you can follow their instructions on where to file. However, in some cases, there might be limited or no instruction. It might say, “Send it to a P.O. box,” which doesn’t always instill confidence that your application will be processed in a timely manner.
Solution:
Many states now allow you to apply online for your business license, which can cut down on processing time and reduce stress over whether your application was received. If you are mailing in a paper application, you may want to contact the licensing agency directly to see if there are any special instructions and if you can send the application via certified mail, if you are looking for that added reassurance.
How do I check the status of my application?
Once you’ve submitted your application, you’ll probably want to check its status. In some cases, that’s easier said than done. While some states have adopted online portals, many others have no way for you to check your application status without getting a hold of someone on the phone.
Picture this scenario: 6 weeks have gone by since you applied for your business license, but you still have not received it. So you try to call John Smith in a specific small county across the country to check the status and you find out that he only works two or three days a week or four days a week and his hours are from 10:00 to 4:00 and there’s a lunch. This can be incredibly frustrating and can lead to many wasted hours trying to track down an update.
Solution:
Some states and agencies have online portals where you can track your application status. If your jurisdiction isn’t one of them, you can call the licensing agency to get a status update, but would only recommend doing so once the processing window that should have been outlined when you applied has passed.
Can the government bodies move faster or expedite my business license?
How long it can take to get a business license is often another source of frustration. This is particularly true if waiting for a government agency to issue your business license is preventing you from getting other tasks completed.
Sometimes an urgent need for a business license pops up, such as the opportunity to bid on a job or a new store opening, or you waited too long to apply and you want to expedite your application, but there is no mechanism to do so. This can be a challenge for many businesses.
Solution:
Unfortunately, getting government agencies to move quickly can sometimes be an insurmountable challenge. In some cases, you might be able to get an expedited license for an additional fee, but this will vary. Often your best best to ensure that your license is processed in a timely manner is to apply online, as well as double check that you have provided all necessary documentation and your application is error-free. Also, if possible, don’t wait until the last moment to apply, so you can avoid any headaches down the road.
Business License Renewal Challenges
When does each governing authority require a license to be renewed?
Once you have your business license in hand, your job isn’t necessary done. Most business licenses need to be renewed at regular intervals, which brings its own set of challenges– starting with when and how often do they have to be renewed? As with most things in the business license space, the answer is that it depends, as it is completely variable. Sometimes, it’s based on your industry. Sometimes, it’s based on the city, the county, the state.
Some common business license renewal dates are:
- Anniversary of when you registered for the license
- Your Birthday
- Set times of year (for example, January 1)
You may also be wondering how long does a business license last? The length of time a license is valid will also vary by jurisdiction and industry. Some business licenses may be good for multiple years, but most will need to be renewed annually.
Solution:
Record all of your business licenses in a running document that keeps track of:
- Business License Number
- Who Issued it
- What Documents were Required
- When it Expires/Renewal Date
It may also be helpful to track when you applied and when you received your license, so you can more accurately plan when you need to begin the renewal process.
Manually tracking license data on an excel spreadsheet or filing cabinet is difficult.
But manually tracking this data is a challenge in and of itself. Whether you’re tracking it in a spreadsheet or have a running list filed away on paper, it can be difficult to keep your records updated and manage when things are coming due. You need to make sure that renewal deadlines not missed and make sure everything gets out to ensure that your license doesn’t lapse and you stay in compliance, while juggling all the other things that come with your busy day.
Solution:
Automate this process by using a service like CSC to help manage business license renewals.
Obtaining the necessary business licenses and staying compliant can seem daunting, but it doesn’t have to be. If you do your homework, pay attention to details and leverage business resources available in your state, you can easily navigate these challenges.
Or, if you prefer, outsource your business license management with CSC. Our services can simplify your compliance efforts and streamline the entire license, permit, and tax registration process—from start to finish, and everything in between!
Want to learn more about business licenses? Sign up for our upcoming webinar, “Take Control of Your Business Licensing Process” on June 18, 2019 at 11 AM and 2 PM (ET). See all of our upcoming webinars here.