When it comes to starting a business or launching a new product line, most peopl

Question

When it comes to starting a business or launching a new product line, most people do not apply much (if any) scrutiny to their business licenses and permits until something goes wrong. More often than not, business owners expect their license and business permit requirements to be simple and their certificates to be easily acquired. As for their renewal deadlines, they assume that those can be dealt with at a later date. However, the reality is not so simple--business owners are routinely fined, stores closed, and penalties levied against store managers for their lack of compliance, so it's not as easy as most people assume. How does an entrepreneur determine what licenses and permits (if any) are necessary to run their business. Why is it important to obtain business licenses and permits before a start-up begins operating.

Explanation / Answer

Licenses and permit requirements depend upon the type of business and the location in which the business is operating. First the products, services and activities of the business need to be well defined. Then business activities that might need licenses and permits must be listed down. Then to obtain permits and licenses, entrepreneurs must get applications from the licensing agencies in their location. The applications must be duly filled up and submitted to the authorities who will issue the permits. In case time is a constraint, consultants can be hired to get the necessary licenses and permits.  

Failing to get licenses and permits is one of the most common mistakes made by entrepreneurs. It is very important to have the licenses and permits in place before starting the business so as to protect the health and safety of public, to make sure that your are accountable for the actions of your business and to keep a track of your finances for comply with tax regulations. In addition not complying with the required licenses and permits may leave business unprotected legally and may lead to penalties. Also, entrepreneurs may not be able to expand their business to new locations when they fail to get the required permits.

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