Do you want to know what type of license you need to open a candy store? If YES, here are 8 type of licenses and requirements needed to start a candy store. According to reports, the consumption of candy around the world averages over $19 billion a year and increases at a steady rate of 3.5 percent annually. More and more entrepreneurs have found success in the candy manufacturing and retail industry.
Starting and running a candy store is a good business due to its appeal to age groups and demographics of all kinds. Candies are known to be profitable for many reasons, but one of the most popular reasons is because candy is a good gift for anniversaries and pick-me-ups year round. Starting a business that retails candy is very straightforward and the biggest challenge you might encounter will be choosing a suitable location for the business.
Normally, a candy shop is expected to be in a very busy area so it can take advantage of foot traffic, as well as impulse buying by consumers. Candy stores are considered food retailers and have to comply with local and state standards of sanitation. Check with the local health department to determine what licenses and permits are needed. If candy is to be manufactured on the premises, the proper licenses for manufacturing need to be obtained.
8 Required Licenses and Permits for a Candy Store in the United States
When you’re engrossed with the excitement of starting a new candy store, it’s quite easy to forget the forget importance of licenses and permits. Indeed, getting licenses and permits is about as fun as visiting the doctor. But failing to do so – and doing it right from the beginning – is one of the most common mistakes new businesses in the United States make. Below are some of the most common licenses and permits candy store owners may need.
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1. Sellers Permit
The major reason governments’ mandate seller’s permits are to enable them to collect sales tax on transactions. Note that failure to secure a seller’s permit could result in penalties and fines as well as back taxes on previous sales. A seller’s permit gives a business the authorization to sell products and services within the jurisdiction granting the license.
Many states require seller’s permits, as do some local authorities, including counties and cities. They can also be called “sales tax permit” or “sales tax license.” Before you open your doors, be sure to register to collect sales tax by applying for each separate place of business you have in the state. A license or permit is important because in some states it’s a criminal offense to undertake sales without one.
2. Health Department Permits
Since candies are foods and are treated as such, you’ll need a county health department permit. This costs about $25 and varies depending on the size of the store and the amount and type of equipment you have. The health department will want to inspect your store before issuing the permit.
3. Federal Tax ID
An Employer Identification Number (EIN) is also known as a Federal Tax Identification Number and is used to identify a business entity. Note that it costs nothing to apply for an EIN, it can be registered online, and most vendors will require a tax ID before conducting business with a retailer.
4. Business License
How and where you register your candy store with the state will hugely depend on your state’s laws. To ascertain what is required to obtain a business license for your candy store in your state, start by visiting your state’s official website. States in the United States have varying resources on how to register a new business and all of the requirements that must be met.
If your candy store will be located within the city limits, you may also be expected to acquire a local business license. Note that some counties and municipalities also mandate a license. Call your county or city clerk’s office for more information. The fee varies depending on the type of business and where it is located.
5. Resale Certificate
To legally purchase your candies to resell and not pay sales tax, your business will need a resale license or certificate. However, not all states require a sales license and each state has its own name for this type of license.
Nonetheless, this type of business license will allow your candy store to buy candies tax exempt from a manufacturer or distributor. Then you collect the sales tax from the customer and pay it back to the state. Most vendors will request a copy of your resale certificate before doing business with your store.
If, for instance, you use any name for your candy store other than your own personal name, you’ll need to file the appropriate paperwork. Have it in mind that some business licenses include a business name registration; others require a separate registration or a DBA (doing business as) certificate. Nonetheless, as you file for corporate business structure, a foreign or fictitious name application is generally included. Again, check your state’s laws for more details.
7. Sign Permit
In the United States, some cities and suburbs have sign ordinances that restrict the size, location and sometimes the lighting and type of sign you can use outside your candy store. To avoid very expensive mistakes and backlash, it is advisable you check your state regulations and secure the written approval of your landlord (if you rent a house or apartment) before you have a sign designed and installed.
8. Certificate of Occupancy
A certificate of occupancy may be needed for business properties in some areas. After applying, the property is inspected by representatives of the necessary agencies. These may include the fire department, the building inspector, and the health and/or sanitation inspector.