Operating an indoor playground requires more than acquiring startup cash, finding a location, and buying play equipment. It takes obtaining various licenses and permits to ensure compliance with local, state, and federal regulations. Getting the writs and proofs you need for each business license takes time, so it’s essential to start the process as early as possible.
We explain what you can expect with each of the following business licenses and permits as you work towards opening your indoor playground.
What Licenses and Permits Are Required to Start an Indoor Playground?
Some licenses and permits are required to open an indoor playground. Failure to obtain them can result in penalties and fines, closure, legal consequences, or even prevent you from opening your location. Receiving legal counsel may help you map out the steps and ensure that nothing is missed in accordance with the laws of your city and state. It’s easiest to work your way down from the top, starting with the required business licenses and ending with location-specific permits you may encounter.
1. Business License
A business license, also known as a business tax certificate, gives you the authority to operate in your jurisdiction. The exact form of this license is dependent on your playground’s location and address. Depending on your business structure and local regulations, you may need both a federal business license and a state business license.
How to Get a Business License
To get a business license, you will want to work through your city and state government. The easiest way to start would be to search your state’s name plus the term “business license” in an online search engine. This will bring up your state’s government website, where the application and procedures can be found. You may be required to register your business name and acquire an EIN before applying for a business license. Requirements will be listed on your state’s website. For more information, you may use the US Small Business Administration’s website to look up your state and city-specific rules for receiving a business license.
How Much Does a Business License Cost?
A business license can cost anywhere from $25 to over $300 to register, with most averaging around $50 to $75. The cost of a business license varies by state, business type, exact location, and expected revenue. You will need to renew this license annually or every few years, depending on your location.
2. Employer Identification Number (EIN)
An employer identification number (EIN) essentially tells the federal government that you are an employer and provides you with a tax ID. With this number, you can hire employees and have them on a legal payroll. Your state will give you an employer identification number that is separate from your federal number, which helps legitimize your business’s standing.
How to Get an Employer Identification Number
To get an EIN, visit the IRS website and follow the application process listed there. This can take a while because the IRS issues only one employer identification number per responsible party per day to ensure fairness. Be sure to apply as early as possible. You can also fax, mail, or call the IRS to submit your application.
How Much Does an Employer Identification Number Cost?
An EIN is free but takes time to obtain.
3. Certificate of Occupancy
A certificate of occupancy indicates that the building housing your indoor playground has passed its final inspection. It deems the building is zoned for your type of business, up to code, and safe to operate in. This may include an electrical, plumbing, fire, and structural inspection as part of the building inspection process.
How to Get a Certificate of Occupancy
To receive a certificate of occupancy, your local building or zoning department must inspect your location. To arrange the appointment, search your state’s name plus the term “certificate of occupancy” in an online search engine to find the information on your state government’s website. This certificate may also include a city and fire permit issued by your local fire marshal.
How Much Does a Certificate of Occupancy Cost?
A certificate of occupancy varies by location, with costs ranging from $100 to $400.
4. Health and Safety Permits
Health and safety permits show that an indoor playground meets all sanitation, safety, and operational regulations. It ensures that your location complies with and remains up-to-date on local safety laws, which are especially strict for businesses serving children.
How to Get Health and Safety Permits
The city or county Health and Safety Department issues these permits and requires inspections. Depending on your county, you may need to complete specific safety training programs to get approved. The respective departments will inspect your playground regularly to ensure the expected standards are maintained. To apply, start by reviewing the application requirements on your local government’s website.
How Much Do Health and Safety Permits Cost?
A health and safety permit can cost around $50 to register. However, the cost of the license varies by establishment type, location, and number of employees. The fees are determined at the time of the inspection and typically range from $100 to $1000. You will need to renew these licenses periodically as well.
5. Sign Permit
A sign permit allows you to display or change permanent signage outside your playground’s building. In many counties, signage size, brightness, and location are regulated and require approval in advance. Receiving the permit indicates that you have met the required standards and codes and can proceed with adding the sign.
How to Get a Sign Permit
To apply for a sign permit, you will need to visit your local county government’s website for the steps and application. This will involve working with a sign contractor and the Zoning Department. You must provide a scale drawing of the signage, and often you will need to submit variations for approval. If your sign includes lighting, you may also need to provide the wiring and circuit plans you intend to establish. Requirements may vary depending on the size and type of sign.
How Much Does a Sign Permit Cost?
The cost of a sign permit will depend on the estimated cost of your sign, including labor, materials, and its size. You can expect a typical range of $50 to $350 for a sign permit, with most costing around $150.
Other Permits to Consider
Aside from the required permits and licenses, you may need to obtain additional permits and licenses depending on the additions you plan to make to your indoor playground. It is essential to familiarize yourself with the following licenses, in case you run into them down the line.
If you’re ever concerned that you may accidentally miss a permit, be sure to share your entire business plan with your legal counsel so they can identify any permits you still need to apply for. Below is a quick review of just some additional licenses you may encounter.
Music License
Choosing the right music for your indoor playground can be a challenge, but you’ve got time to figure it out. You need a music license to play music from any platform in your facility. So, while you’re perfecting your playlist for the kids, apply for a music license to comply with copyright law. You can work with several companies to use the music they have rights to, such as the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Incorporated (BMI), or Global Music Rights (GMR). No matter where it’s coming from, you need a license to play music in your playground. The pricing can vary but is usually between $250 and $2,000. A live entertainment license is a similar permit you may also be interested in researching.
Resale Permit
A resale permit, also known as a reseller permit or a resale license, prevents double taxation on a product by collecting tax when your customer buys it, rather than when you initially purchase it. A resale certificate is generally only needed if your indoor playground sells merchandise or snacks and is located in a state that issues sales tax. You can register online with your local government to receive a tax-exempt certificate. The fees vary depending on your security deposit amount and can range from $0 to $50.
Valet Parking Permit
The need for a valet parking permit can vary by state. If you plan to have valet parking for your indoor playground, check with your local government to see if you need a permit. If so, you may need to present a detailed plan for your valet service, including the pickup and drop-off points, the number of parking spaces, how payment will be collected, and letters of agreement from your designated drivers. The fees associated vary by state.
Dumpster Placement Permit
If you need dumpsters for your indoor playground, you may also need a dumpster placement permit. This would allow you to place a dumpster outside your facility for waste management and trash disposal. The cost of the license can vary depending on the dumpster’s placement and size, as well as the location of your establishment.
Conclusion
No matter what type of indoor playground or family entertainment center you’re starting, obtaining the correct permits and licenses is essential to your success. With penalties that can affect your bottom line or even close your doors, you will want to thoroughly research the business licenses you need and start the application process early to allow them time to be issued.
