Obtaining a business license varies by state and in some areas it varies by city or county. In fact, even the types of business licenses that you’re required to get might vary based on your geographic location. The basic process of obtaining a license can be outlined in a simple three step process: research, submit your application with any required fees, and display your business license. 

Business licenses can cost between $10 and $500 or more, depending on the type of license you need and where your business is located. A simple business registration license is typically a way for states to know who is operating within the state while more serious licenses, like a liquor license, is a way for states to regulate potentially dangerous substances. 

Before you can apply for a business license in most states, you’ll need to legally register your business with the state. This means preparing and filing all of your LLC or corporation documents and making sure the state files the documents. MyCompanyWorks can complete this process for you in just three easy steps. Get started today by filling out a simple online form. 

Obtaining a Business License in 3 Steps

There isn’t a one size fits all process for obtaining a business license. The process will always depend on the type of license you’re applying for and where you live. However, we’ve outlined a basic process that can be followed to first understand what your requirements are and second to complete all needed application materials. For the purposes of this process we’re going to assume that you need a basic local business operations license. 

Step 1: Research Your State, County, & City Requirements

The first step in the process is to research whether you need a business license or not. Most businesses that need to obtain a business license will have physical locations within the city or county. Typically this is defined as an establishment that local citizens can walk into. Some home-based businesses are also typically required to obtain a license. The types of home-based businesses that generally need to get a license include: 

• In-home childcare or preschool
• Any business that has clients or customers physically coming to the home
• Any business that is required to obtain a license by a government entity based on the industry the business exists within

All business owners should consult with both the state government and the local government to determine all business license requirements. The last thing you want is to get your business shut down after you’ve opened your doors because of a failure to obtain the proper licenses. 

For a basic business license, most states will either set the rules or allow the local government to set them. In most situations you won’t have to pay fees and register with both legal entities just to open your doors. However, as more license needs occur you could be working with multiple layers of government or multiple agencies at the state government level. 

For example, a local bar may be required to obtain a normal business license from the city the bar is located in but will also be required to obtain a liquor license directly from the state. This is pretty standard and you should plan for anywhere between a few days and one month to obtain a business license, depending on the type of license you need. Some states may take even longer to process applications for potentially dangerous licenses, like a liquor license. 

Step 2: Complete Application Requirements & Submit All Fees

As soon as you know what the requirements are for your state you need to collect all required information and fill out all application forms. Keep in mind that if your business has multiple physical locations then you may end up having to complete the license paperwork once for each location, especially if they are in different cities or counties. 

Once you’ve completed the paperwork you should have a professional look it over to make sure you’ve done it correctly, or at least someone who can provide a second pair of eyes. If you’ve put the right signatures on the documents and have included all requirements then you should now submit the documentation with any required fees. 

Some states will require you to fill out the paperwork and bring it into a local office while others will let you mail in the paperwork or even fill out all of the documentation online. Regardless of the method each state allows you to submit the paperwork, you’ll likely get your license in the mail within a certain period of time. 

Step 3: Receive Your License & Display it in Your Business

Once the state or local government is satisfied with your paperwork they will process your application and deposit your fee money. The officials will then, finally, print your business license and send it to you. You need to read over any information that is given to you very carefully when you receive your license. 

Many states will require you to properly display your business license for all of your customers to see. There could be very specific rules with how or where you need to display the license. For example, you may have to display it within typical eye-level of your customers and within ten feet of the front door, or right behind your main check-out area. Regardless of the rules, it’s important that you follow them to the letter of the law or your license could quickly be revoked. 

Types of Business Licenses

While most businesses will need a general operating license, there are many different types of business licenses that you might need to successfully operate your endeavor. The types of different licenses you need will depend on what industry your business is in and on what you sell. The types of business licenses you might need include: 

• Local Operating License: This is the type of business license we discuss above, and the most common license businesses apply for.
  
• Building Permits: You may be required to get a permit, or license, for any remodeling work that might be needed within your business’s location.
  
• Zoning Permit: The local government will need to approve your use of the land you’re operating on for the specific type of business you’re operating. For example, if you’re in a retail zone and want to open a manufacturing operation then it may take some convincing of local politicians.
  
• Fire Department Permit: This permit is essentially passing a test by local officials that says your building is structurally sound and you’re given a maximum occupancy that is safe in the event of an emergency.
  
• Health License: These are typically needed by restaurants or food establishments.
  
• Sign Permits: You’ll likely need to get approval of the city for any exterior signs in terms of size and possibly color or other specific decor.
  
• License to Serve Alcohol: You’ll need a license to serve alcohol that will be consumed at your business and a separate license if you’re going to be selling alcohol that isn’t consumed there.
  
• Seller’s License: You may be required to get a specific license, depending on the types of goods that you’re selling to consumers.
  
• Occupational License: If you’re a business professional then you’ll be required to register as one and make sure you’re properly licensed before opening your doors.

In addition to all of the permits and licenses above, you may be required to apply for some business licenses that are regulated by the federal government. If you’re in certain industries then you should make sure there are no federal licenses that you must obtain. These industries include: 

• Aviation
• Mining or drilling
• Public transportation
• Logistics (including maritime)
• Agriculture
• Fish and wildlife
• Nuclear energy
• Broadcasting 
• Firearms or explosives

The key to covering your business properly is to make sure that you’ve exhausted the levels of government to make sure you’re obtaining all the licenses your business needs. You can either hire a professional attorney to help you through the process or you can reach out and communicate with your local government officials to get specific requirements. 

Get Started Today

Before you complete your business license research you should make sure your business paperwork has been completed with the state. This means starting your LLC and filing all appropriate documentation. MyCompanyWorks will complete all of your required documentation and submit it to the state where you business exists for you. You can get the process started today by filling out a quick online form. 

In addition, we offer a Business License Compliance Package that does all of the tedious research for you and gives you all the forms and instructions in one simple online dashboard to complete and submit to the proper authorities.

Corporate bylaws are the legal rules a corporation is operated by after the business if formed. Once the organization has a legal entity that has been filed with its state, the board of directors will typically decide on the bylaws which the company will live by going forward. Some examples of bylaws include listing a registered agent and defining the classes of stock for company ownership. To see what bylaws look like, you can see Microsoft’s at this link.

One of the main reasons LLCs became so popular for small businesses is that bylaws and other corporation complexities are not required. Instead, the business creates an operating agreement at the time the legal entity is formed. Many states don’t even require an operating agreement for an LLC to be formed and start operating. If you’re interested in forming an LLC you can learn more about your state’s requirements by checking out are State Startup Guides.

Why You Need Corporate Bylaws

Bylaws help ensure that your corporation runs smoothly. These rules outline the internal rules of your business, from a legal standpoint. The bylaws outline how decisions are legally made, who gets to vote, and the structure of how it works. If your business is very large, or you plan for it to be, then this will be helpful to make sure there’s organization to the chaos of both making big decisions and having a large ownership structure. 

The bylaws are important for all corporations to have, especially if you end up becoming a publicly traded one. This is because the bylaws outline how the official books are to be kept and what the reporting timeline looks like. Anyone wanting to invest in your business will want strict rules around how they’ll be able to keep up to date with what’s happening inside the organization’s performance. 

The bylaws also outline how the stock of the company is going to be divided up. It’s important for any business that plans to sell stock or take on investment money in the future to have a strategy behind the various classes of stock and how those stocks are transferred between owners. There also needs to be set rules around qualifying stockholders and knowing exactly who has a right to make business decisions and who doesn’t. 

However, the main reason you’ll create bylaws when you’re still a smaller company is because it’s required for all corporations to do so. What many small business owners don’t know is that you can start out as an LLC, which has more relaxed rules, and then as you start to grow you can switch to a corporation later. If you’re unsure of what the success of your business might be then this might be your best bet. 

Note: As of the date of publication, the only states that require your LLC to create an operating agreement are Delaware, New York, Maine, California, and Missouri. 

Example of the Benefits of Bylaws

All states have rules around how businesses are meant to operate and interact. If you’re not required to create bylaws, or an operating agreement for LLCs, you might still want to in order to counteract some rules in your state.

For example, some states might have a default rule that all profits are evenly distributed or that the legal responsibility for a company’s actions is evenly distributed among shareholders. In many cases you can actually get around these rules by having very strict bylaws that says the profits or legal responsibility is broken down much differently than the state’s rule. 

How Corporate Bylaws Work

Bylaws are pretty straightforward, like most legal contracts. The bylaws are not registered with your other incorporation documents that you provide to your state, but they can be equally important to operating your business. While you don’t legally file the bylaws with your state, it doesn’t make them any less enforceable. The bylaws are binding as soon as a majority of the board of directors votes them into action. 

The size of your corporation’s bylaws will heavily depend on the size of your business. You may want more relaxed bylaws early on and then you may want to enact more strict rules right before you take the company public. Things like the number of directors the business has will also have a necessity to change as time goes on and you grow in both revenue and employee count. 

Typically whatever the bylaws say is the law for your business. Legal entities typically have the right to operate internally in anyway that the majority of shareholders agree to. This means that while you’re legally bound to your bylaws, you have a lot of flexibility in how you can setup your business to operate the way you need. 

How Corporate Bylaws are Created

The creation of bylaws is simple from a legal standpoint. All you have to do is draft them and get a majority of the board of directors to vote “yes” on enacting the document. There aren’t a lot of rules that restrict you on the actual creation of your bylaws in terms of what can be included in them, but there are many common things that you should include to make the legal operation of your business clear and concise. 

Common Corporate Bylaws

Some of the most common corporate bylaws include:

• Your Business Management Structure: How many Directors will your business have? Who has the legal authority to make binding decisions for the business? Who is ultimately responsible for legal or tax filings and who is the contact person or group for your business?
  
• Your Business’s Registered Agent: If your business is going to receive legal notices or documents in the future then they will be sent to your registered agent. It’s important to keep this part of your bylaws up to date so that you don’t miss an important legal notice. Whomever you have in your official bylaws is the only person or group that has to be contacted for notice to be given to you.
  
• Classes of Stock: How much stock do you have in the business initially, what classes are there, and what are the rights and privileges of those classes? This is extremely important if you’re bringing on outside capital or going public.
  
• Voting Rights: This should be called out specifically so it is clear who has the legal opportunity to weigh in on big business decisions, like taking on outside capital or selling the business.
  
• How the Business Can Be Dissolved: This is important to include so that the only ways to dissolve the business are clear to everyone, regardless of any state statutes.
  
• Corporate Meeting Information: How often do the directors meet and what is the purpose of those meetings? Are these meetings the only time that big decisions can be made and if so, can the board of directors call a special meeting to vote on something important? How do you give notice of meetings to directors? These are all important things to spell out so that there is no internal legal dispute amongst shareholders.
  
• Dividends: If the shareholders have a right to dividends then it should be spelled out in the bylaws on when they might receive one and how it would be dispersed.
  
• Amendments: Any specificity you can provide on how amendments to the bylaws are enacted in the future will be important to make sure it’s clear how things can adapt and change over time. 

This list isn’t all-inclusive for every business. If you need complex bylaws, you should partner with a lawyer that is experienced in setting up businesses and enacting bylaws for many different types of businesses. 

Does My Business Need Corporate Bylaws? 

The real answer to whether or not your business needs bylaws is that it really depends. If you’re starting a corporation then you’ll need to draft a set of bylaws. However, if you’re a smaller business or unsure of what direction you want to take your new business, then you may benefit from starting out as an LLC, which means you won’t need corporate bylaws. We do recommend that you still craft an operating agreement, even if it’s not required in your state, especially if your business has more than one owner. 

Getting Started With Corporate Bylaws

Whether you’re getting started with your corporation and need to enact specific bylaws for your business, or you instead want your legal entity to be an LLC, we can help. My Company Works has completed over 60,000 legal business formations and our packages include an Operating Agreement (for LLCs) and Bylaws (for a corporation).

Below is an excerpt from Part One of our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here.  

“Optimism is a force multiplier.” – Colin Powell

I’m sure there are successful founders who are not optimistic—I’ve just never met one. Seriously though, an optimistic mindset is a huge source of energy, and the good news is that optimism can be learned. (See the Chapter Resources for more information.) Pessimistic and negative people are usually not only low energy themselves, but they tend to drain the energy of everyone around them. Pessimism is the last thing a founder needs in the startup process.

Think about it, have you ever met a pessimistic “Debbie Downer” who was a successful businessperson—or successful anything? I cannot think of one example outside of perhaps a few “artist” types that used negativity in their artwork. Otherwise, every inspirational business book or biography inevitably has an incredibly optimistic person behind it, and I don’t think that’s a coincidence.

Note that I’m not advising you to not be realistic; you can be realistic and optimistic. I’ve joked that optimism is worth twenty extra IQ points because you don’t immediately give up. When you have optimism, you give your brain permission to look at the bright side of things as they happen and see possibilities that a pessimist may have rejected or not even thought about.

That’s exactly how an entrepreneur needs to deal with the inevitable curveballs that will be thrown at them. They need to realistically assess the situation and see if there are any solutions to mitigate the problem, change the situation to their advantage or, at the very least, learn a valuable lesson. An optimistic mindset and many of the other superpowers in this part of the book will help you move away from pessimism and toward solving problems, which is what great founders primarily do.

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here. 

Our culture is full of success stories of businesses that seem to start spontaneously in someone’s garage or a college dorm. We are drawn to this narrative of genius ideas and bursts of inspiration because it’s a more appealing story than someone who lays down the groundworks with a solid plan.

While we all want to believe that having that one great idea will lead to a great business, the reality is that most people need some kind of a business plan in order to test out ideas and execute them successfully. No small business can sustain itself for long without covering the basics.

Think of a business plan as a tool that can help you straighten out your thoughts and priorities. First and foremost, it’s a document written for you and your company. The process of writing the plan can guide you to think about areas of the business you may not even have considered. In doing so, you’ll be able to get an even clearer vision of your company, understand what’s practical and what’s idealistic, and set you on a path toward starting a sustainable business.

The Small Business Administration (SBA) separates business plans into two broad categories: traditional vs lean startup. 

• Traditional: This type of business plan is more detailed and comprehensive, and takes longer to write. The benefit of having a traditional business plan is that you can present it to investors, stakeholders, and banks who will often request the document from companies. 

• Lean startup: The lean business plan is shorter (as long as one page if you want), focuses on the basics, and can be modified and changed easily over time. If you’re still at the early stage of starting a business, you may want to start out with a lean business plan to clarify your company’s objectives and expand it as you go.

We’ve developed our own approach that combines the best elements of both the above––the Startups Made Simple Business Plan.

What is the Startups Made Simple Business Plan?

The truth is, most startups and small businesses don’t need an exhaustive, detailed business plan. When you’re starting out, time is of the utmost essence. The last thing you want is to spend hours polishing a pristine document that at the end of the day will only remain a document. 

Small businesses require a lot of flexibility and testing, especially during the early stages when you’re just starting out. That’s why the Startups Made Simple Business Plan focuses on getting your ideas out quickly so that you can test them and make adjustments based on your learnings.

The idea is to quickly go through your ideas to see which ones are really worth testing––you don’t want to waste time testing something out and spending valuable resources when a simple plan would’ve shown you it wouldn’t be practical––then execute quickly, learn fast, and improve fast. We do this because, at the end of the day, small businesses need speedy execution to grow. Planning alone won’t cut it by any means.

So below is a checklist of the essential items your business plan should contain.

• Vision: What’s at the heart of your business idea and how you see your company scaling over time
• Elevator pitch: A core understanding of your company, succinctly summarized so anyone can understand it easily
• Target market: A clear understanding and articulation of the audience or customer you’re trying to reach, including demographics, interests, and needs
• Tests to run: A list of items and strategies you can execute to test the validity or quality of your ideas and start establishing your company, i.e. surveys, website, mockups 
• Back of the napkin math: Simple, quick calculations regarding your current and future expenses to give you a tangible number to work with rather than chasing arbitrary profits
• Reverse engineer: A practice of envisioning the end product and working backward to see what steps you’d need to take to make that happen
• Worst case scenario: Imagining the worst thing that could happen so you can prepare and come up with a backup plan 

Let’s dive into some of the key points on this list.

State Your Company Vision

If you can’t quickly and concisely explain what your company does, it might be a sign that you need to work on your idea. Just as movies and TV shows have loglines to hook viewers into their contents, your vision of the company should be a quick summary that lets the reader know what’s at the core of your idea.

Tip: Don’t worry if you can’t come up with a clean elevator pitch from the start. It’s normal for your company description to be messy and long in the beginning, but through the process of refining your vision, you’ll gain a better understanding of your ideas and narrow down the complexities into a clear, easily understandable idea.

Define Your Target Market

Product-market fit (PMF) is one of the biggest reasons businesses fail. You may have a great product but if no one wants them––for reasons ranging from a too small market to unrealistic prices––you don’t have a business. This is why any business plan should specify the audience you’re trying to reach with your product.

Thinking about who your product is for and why and how it would benefit them can help clarify your company goals. Defining your target market is one of the most important things you can do in advance to avoid troubles down the road. Other details might be easier to swing or modify as you go, but skipping on product-market fit can have disastrous consequences for businesses unprepared to meet the reality of the market.

Tip: Sometimes you can’t know whether you have the right PMF until you go out and test. Whether through building prototypes, sharing your products for free, or surveying different types of potential customers, have a game plan for how you can test out your target market in advance. 

Think About the Cash

Even if you’re not writing up a detailed business plan for an investor, thinking about the cash flow and funding of the company will help you prepare for the more practical side of the business. After all, ideas and visions are great, but without the money, it’ll be harder to execute them. 

Here are some questions you can ask to think about this area:

• Are you planning to raise funding for your company? How? 
• How much capital do you need to start your business? 
• What will your business model be and how do you envision your income stream? 
• How are your competitors or other companies in the market conducting their businesses?

Tip: Businesses often incur expenses that are easily overlooked. To avoid the problem of tacking on unforeseen expenses on your bill, do a quick, calculation of your current expenses (bills, rent, food, office, contractors, suppliers, etc.) to find out how much cash you’ll need to keep the business running. This will also help you set a more realistic price for your product and can potentially help you cut down unnecessary expenses to keep things lean at the start.

Plan for Long-Term Items

In the eagerness to start a business, certain long-term items can easily be overlooked. That’s why it’s important to remember to include them in your business plan. Whether this is the time it might take to manufacture your product, or a long-term lease on your office or warehouse space, thinking realistically about this in advance can save you a lot of headache down the road.

Tip: Give yourself ample buffer for the items on this list. We have a tendency to overestimate our abilities to get things done and underestimate processes that often turn out more costly and time-consuming than we expect. Businesses are always prone to unforeseen expenses such as a supplier running out of materials, weather affecting a delivery, or a machine breakdown that delays production. Especially when starting out, we may not consider these items and get blindsided when they happen. 

Share, Test, and Repeat

The Startups Made Simple Business Plan is not a perfectly polished piece of document. Rather, it’s a tool that can help small businesses launch their ideas in a realistic but efficient way, allowing for plenty of testing and mistakes along the process.

Share your business plan with colleagues, customers, or whoever you want feedback from. Show them your mockups or prototypes if you can. Use survey tools to reach more people. When you find that something doesn’t work, go back and modify your strategy and plan. Then repeat this process over and over until you’re confident you have a solid, viable product that’s ready for a market debut.

Most of all, don’t be discouraged by negative feedback or ideas that don’t work out. This is all a natural part of the process––one mistake means one step closer to success. Always have a backup plan so that you don’t bank all your cash and resources into a single idea. At this stage, it’s more important to try out your ideas and see which ones will stick rather than betting only on one horse that you’re not yet familiar with.

Below is an excerpt from the Introduction of our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here.  

“I’m convinced that about half of what separates the successful entrepreneurs from the non-successful ones is pure perseverance.” – Steve Jobs

“Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.” – Calvin Coolidge

I’ve noticed the best entrepreneurs are known for their perseverance; they can be trusted to get through the rough stuff. So many of the great tales in business and in life are about the person who simply did not give up, even after many obstacles and setbacks. Resilience, persistence, grit, tenacity, confidence, and relentlessness are related traits, and in general, overcoming fear is a big part of perseverance. 

In my opinion, people have been taught to quit way too quickly. Scammy marketing and advertising has conditioned many of us to expect fast or even instant results. The truth is that many skills take years to develop. Some things as simple as a handstand can take many months of daily practice to master, yet the majority of people give up in a few weeks or if they can’t find a program called “Mastering Handstands in Only One Week!”

This doesn’t mean it will take years to learn how to get your company going; it only means that you shouldn’t immediately give up if you’re not performing like Elon Musk in the first year of your startup. Some startups, the smart ones anyway, may take a year or two to work on their idea, test things in the marketplace, quickly pivot to another product or service, and continue learning from their customers. There will be much more on this in Part Two of this book, and there is such a thing as going on too long. Mostly, the problem lies with giving up too early. 

For now, just know that your first instinct, especially when things get tough, may be to quit. Quitting sounds so comfortable (for lack of a better word) when things are bad. I wanted to quit several times in the first couple of years for, in retrospect, completely ridiculous reasons. 

Make sure that if you’re thinking about quitting that you’re not closer to victory than you think you are. A lot of entrepreneurs quit on the ten-yard line right before they are about to succeed. This is so common that it’s almost legend now. I’m asking you to carefully consider when you feel like giving up. I’ve learned that some days are just going to be a “shit sandwich,” and you have to take a bite. You will have bad days or maybe even bad weeks, and a perseverance mindset will help you greatly. 

Also, business is not nearly as hard as some stories out there about people sleeping in their cars or having nervous breakdowns. In fact, I think a lot of successful entrepreneurs like to embellish their startup stories to motivate their teams and create a hero’s journey for the startup. (I’m certainly guilty of that myself on some occasions.)

However, the business world can be competitive and you can be pushed around if you’re too sensitive or thin-skinned. You want to develop a thick skin and also hire other people who have thick skins. In my opinion, overly sensitive people are typically not fit to be in a startup environment. A lot of business is about not being intimidated by partners, employees, customers, or vendors. 

I’ve found a stoic outlook can be best for getting through the rough patches. Winston Churchill once said,“If you’re going through hell, keep going.” I’ve also learned that in business “they can’t eat you” (customers, vendors, competitors, employees, etc.), so some days you have to just smile at the absurdity of worrying about things as if they’re life or death and try to have a good time with it all. 

Finally, there is such a thing as having too much perseverance; a good entrepreneur knows when it’s time to quit. This may not always be obvious to us, but a very good indicator is when the product or service is not getting any traction despite your best efforts. 

In these cases, you don’t have to admit defeat; only acknowledge that you don’t like working for free and the market is firing you—for now. In Step 1 of this book, you’ll see how this has happened sometimes dozens of times to great founders and is not something that should discourage you. 

Remember it’s all a Game

“One of the symptoms of approaching nervous breakdown is the belief that one’s work is terribly important.” – Bertrand Russell

In reality, it’s all a big game, and you can’t take any of it with you in the end (regardless of your religious beliefs), so really take some time to consider that you don’t need to take any of this stuff too seriously. If you can take care of your physical and mental health while persevering through it all, you’ll do great. 

The universe is inconceivably large, billions of years old, and you’re a tiny organism on a spinning rock orbiting a random star in one of billions of galaxies. Even if your work was actually world-changing and important, the universe would barely notice. Genghis Khan or Caesar were little more than a infinitesimal blip in the universe, and taking yourself too seriously is a great way to be miserable. This is not meant to depress you or to say your work doesn’t have meaning, but to provide perspective for you to remember that all you have is this life now, so do what you can to give it meaning for you and try to have a good time. 

This was an excerpt from our book Startups Made Simple: How to Start, Grow and Systemize Your Dream Business. Learn more about the book here or see our previous excerpts here.