Do you need a business license to do an online business?

Starting up a new business can be extremely risky. In fact, there are so many factors you would have to look into for starting up a new business such as tax factors, licenses etc. Some businesses require a lot of government involvement when starting up their business. So, what business is it that you don’t have to go through the hassle of getting all that stuff together? The answer is an “Online Business”.


Is a business license needed for online business?

The answer to this is NO! In fact, you really don’t need anything to certify you to do online business. This is the beauty of this field. However, how much money you can make is depending on individual capabilities, the amount of hard work and determination.

Many people want to start an online business but have no idea where to start, what it’s about, or what they will need to get their business up and running. Finding the right information and instruction is not always an easy task. I intend to at least point you in the right direction with the information in this article.

When I wanted to start my own online business, I was not sure if I need anything like a license and some other relevant stuff like tax paper. But, I actually ended up starting an amazing business online without the need to get a business license.

After making a hell lots of research, I found out that, working online is different from the conventional business (Brick and Mortar) and did not need any business license. If you have a particular skill set, you can use those skills online. This could include business education, writing copy for websites, graphic designer, website developer and even being a virtual secretary.

Websites like Elance and Upwork have thousands of customers who are looking for people that can provide skills in return for payment. Are you one of those skilled people? Regardless of your age, education, technical skills or qualifications, in a simple language, there are no specific requirements for being a successful online entrepreneur. However, you will be more successful with a solid business model to work from, clear direction, training and support.

Let us do a little research and check out the Pros and Cons of an online business and a brick and mortar business.

Related article: What are the risks of doing online business?


The Conventional Brick and Mortar Business

Brick and Mortar Business

1. You will need to find a place that will fit your business needs. This means you will have to rent, lease, or buy a place to get started. Keep in mind that on most conventional businesses, location is critical and can be the deciding factor on success or failure.

2. Now that you found the perfect building and location you will need to invest in remodeling to make your new building fit your needs, whether it is for an office, restaurant, store, gift shop, garage, etc.

3. If the electricity and phone is not already on, you will need to put a deposit down to get them turned on.

4. Capital for inventory and equipment that will be needed.

5. Let us not forget an advertising budget. You will need to advertise your new business to let the public know what your are selling and your location.

6. Until your new business is able to show a profit and pay the bills, you will need to have enough money to cover all your business overhead, your wages and unexpected expenses for at least 6 months.

7. It is very important to have liability insurance, in case someone gets hurt or killed at your new business. A law suit could ruin everything.

8. You MUST apply for a business license.


Okay, we now have our brick and mortar business up and going. There are couple of things we should think of when we get to this point.

Until you are able to hire employees, expect working for long hours and no vacations. If you are not there to run your business, you are not making money.

The key is finding employees that you can fully trust and depend on to handle your business while you are away. I suggest staying away from hiring family and friends if possible.


Online Business

Online Business

Now let us look at starting an online business compared to a conventional brick and mortar business.

1. No building to rent, leases or have to buy.

2. No need to spend money on remodeling, your new online business can be operated from the same room you have your computer in.

3. The chances are the only equipment you will need that you already have. A computer and internet connection.

4. Location does not make a difference. With a laptop and satellite connection, you can run your business anywhere in the world.

5. You will be able to take vacations anywhere and anytime.

6. No need to worry about hiring employees and this eliminates a lot of stress in terms of managing them.

7. No extra insurance to buy because you are working from home.

8. You do not need an office to run your online business. This also means no extra electricity, water, phone and gas bills to pay.

9. You do not need any inventory to do online business.

10. Business license is not required to get started.

11. No experience is required to start an online business as there are many successful online entrepreneurs for you to follow.

12. Advertising for an online business is easy. There are many ways to advertise for free or at a very low cost.

13. You get to choose when and how long you want to work each day. However, be prepared to put in a lot of hours at the start of your online business.

14. You can start part time and keep your current job until you are earning enough to quit.



However, you should know that there are different online business programs, plans, ideas and concepts out there on the internet. Is one better than the other? It is impossible to say that one works better than another because it all depends on the type of person you are. The type of online business that your next door neighbor runs might be highly profitable for them, but it will be a real challenge for you. Nevertheless, you do not need a business license to do an online business.


Check it out:

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Let’s Talk!

Please do comment below if you have any feedback or anything that you want to share with me.

Have a great day!

4 Replies to “Do you need a business license to do an online business?”

  1. Hi Howard,

    Captivating topic to write about and thanks for breaking down the differences between starting a brick and mortar business and an online business.

    I am one of those that are stuck in my day job but still dream of starting a business, and the online business you are talking about seems like the perfect opportunity for people like me!

    Appreciate the sharing! Keep it up!

    Speak soon,

    1. Hi Merrell, thanks for your compliment. I wrote this article is because I heard people from the public when I was taking train outside were talking about business license. So I was thinking of just sharing with everyone about whether people need business license to do online business or not.

      Starting a business is easy, but prospering and maintaining are the hardest part. If you want to start any business, make sure your mindset is at the correct place to get you started.

  2. Thanks Howard.

    Great Topic. I have had even a non-brick and mortar business with a partner to which I am the only employee. The complexity of setting up an LLC (with pass thru S-Corp federal taxation…blah, blah, blah) what a pain in the bottom parts. Then there is the local b-license, then there is setting up with the state’s revenue department to take their various pounds of flesh. Not to forget a DBA which needs to be regularly renewed and advertised.

    No. I think the WA will end up being a much better way for me to spend my time and money in order to have more time and make more money.

    Thanks for the article.

    1. Hi, you are welcome. I believe starting a traditional business is more than a hassle as compare to start an online business. A lot of things need to consider and more money is needed to build it. Moreover, before you start building it, you already need to pay sum of money for a business license. I would say doing an online business is a way much easier to start and manage along the way and WA is the best platform to follow through it.

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