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Starting A New Business In TC?

Many people, at one time or another, have had visions of owning or operating a small business.  Entrepreneurs often long for the independence of being their own boss and making a success in the market place by utilizing their special skills.

Yet, it is well documented that upwards of 50% of all new businesses discontinue operations within the first two years and only 20% survive beyond five years. Many of these businesses could have survived with a little more planning on the front end.

This month’s blog will cover just a few of the areas that future business owners should be aware of and plan for in their pursuit of greatness.

Licenses, Permits and Regulations

Many communities like the City of Sonora and the County of Tuolumne have planning and/or business licensing departments. If you are in an unincorporated area, the county controls most of your business requirements.

Typically, the county continues to control health and food permits, hazardous waste regulations and pollution control issues.  Check for details on requirements that apply whether you are remodeling an existing location or starting up a new business.

If your business is located inside the city limits you need to check with the City of Sonora’s business and community development departments before you begin operating your business.

Business Licenses and Permits – All regular business permits are managed at the county and/or city levels mainly through laws passed at the state level.

Many professional occupations, such as accountants, cosmeticians, optometrists, realtors, contractors, and businesses such as automotive sales and repair, beer, wine, and liquor sales, pest control, real estate appraisers, to name a few, require additional state licensing.  Contact the State of California Department of Consumer Affairs or the Contractor’s State Licensing Board to find out what licensing board governs your profession. For California businesses most of this information is now available at the state’s web-site or the Contractors State Licensing Board site.

Fictitious Name Statement – If you operate a business under any name other than your own, you must file a fictitious name statement.  This is also referred to as a DBA (doing business as…).  This statement must be filed with the Tuolumne County Clerk’s office.  Within 30 days of filing for the fictitious business name, you must run a “Fictitious Business Name Statement” in a local newspaper with a general circulation in your market area.  The statement must run “weekly” for 4 consecutive weeks.  At the end of the 4 weeks, the newspaper will issue a “Proof of Publication” certificate that must be returned to the Tuolumne County Clerk within 30 days.

Seller’s PermitsAll businesses involved in the sale or rental of tangible personal property must register with the California State Board of Equalization for a seller’s permit, resale license or “wholesalers” license.  A security deposit may be required and can be done by; 1) Non-interest bearing cash deposit, 2) Bond, or 3) Bank or savings and loan certificate of deposit.  This permit will provide you with a registered resale number that you are required to use when conducting business.  Permits must be posted where they are clearly visible.  To obtain more information on the seller’s permit, resale license or wholesale license, contact the California State Board of Equalization or visit their web-site where you can register for a permit/license on line. To date there is no cost for these permits.

Health and Food Permit – If you sell or handle food, a permit from your local Health Department is necessary.  These regulations are extensive and precise.  Make sure you talk to all agencies regarding your requirements.

Other Permits – The City and County are responsible for public safety, and some permits may be required for your new business.  Before you begin to remodel a building or even rearrange attached signs, etc., be sure to contact the Building Department and find out what permits are needed and the cost and proper procedures for the work.

Construction Zoning – Your business must meet local zoning requirements and any construction must conform to local building codes.  Building permits are required for new construction as well as structural building improvements.  If you are seeking a location for your business, thoroughly investigate zoning ordinances to be sure your choice is zoned for your business activity.

Zoning and Home Business Requirements – Before signing a lease or beginning business you should verify that the location complies with all zoning regulations.  Building and Planning Departments monitor compliance.  Request a copy of the restrictions and allowances for that location.  You may have to apply for a zoning permit known as a “conditional use” permit to allow for special uses.  Ask the Planning Department what information they need; approximate costs, estimate time and the likelihood your special use will be approved.  Ask if you are required to attend City Council/Board of Supervisors or Planning Committee meetings.  You may need an occupancy permit before opening your business location to the public.

CEQA – California Environmental Quality Act (CEQA)

State law requires that an environmental assessment be undertaken for projects that have the potential to have an impact on the environment.  All development projects have such potential impacts, and so all projects must be assessed under CEQA.   Most land use policies may affect the environment and are also subject to review under CEQA.

There are three levels of CEQA review:

  • Exemption.
    Many types of smaller development projects or projects that can be seen with certainty to have no significant detrimental impact on the environment are generally exempt from CEQA.  For example, an addition to a single family home or the construction of a new home are generally exempt from CEQA review.  While many smaller projects are exempt, it should be recognized that certain circumstances may trigger a higher level of CEQA review, such as even a small addition adjacent to a creek or a single family home in a highly unstable geological location.
  • Initial Study.  When city or county staff concludes that a project has the potential to have some detrimental impacts on the environment, staff will conduct an “Initial Study”.  Upon completion of the Initial Study, staff can come to one of two conclusions:
  • Negative Declaration.  Under the specific circumstances of the particular case, there are no potentially significant impacts; or any identified potentially significant impacts can be mitigated to a less-than-significant level through the adoption of mitigations.  Under these circumstances, the project is eligible for a “Negative Declaration”.  If there are no significant impacts, then no mitigations will be required.  Should impacts be identified, then mitigations must be adopted as part of the project and included as conditions of the project and those impacts must be mitigated to a “less than significant” level.
  • Environmental Impact Report (EIR). If the Initial Study identifies one or more significant impacts on the environment, and those impacts cannot be mitigated to a less than significant level, then the city or county must prepare an Environmental Impact Report (EIR) at the developers cost.  An EIR will consider potential impacts and mitigations, and also alternatives to the project that would not cause those significant impacts or would have lesser impacts than the proposed project.

Once the appropriate environmental determination and the Negative Declaration or EIR is prepared, the city or county will proceed to act on the development project.  The city or the county cannot act on a development project until the CEQA assessment is completed and adopted

Sign Ordinance – Sign permit approvals are often required whenever you install, move or remove signs.    Find out the requirements before you spend any money to purchase a sign.  Get a copy of the sign permit application so you know what documentation to provide.  Applications require the building owner’s approval, plans & specifications, color and material description.  This is needed before you make the sign and submit the application. When the permit is approved, ask the Building or Permits Department if you must have a building permit to install the sign.

As you can see, there are many regulations that can affect your business. But if handled correctly, many of them can easily be addressed and you can be on your way to a successful new business.