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What is the Difference Between Licensure and Certification? Covering Business Basics
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What is the Difference Between Licensure and Certification? Covering Business Basics

Next Insurance Staff
By Next Insurance Staff
Apr 28, 2019
6 min read

When you decide to go into business for yourself, you need to make sure all your bases are covered. This begins with learning your profession, acquiring the right credentials, and then registering your business.

Each profession has its own demands on all these fronts. And following them is essential to your success. But the difference between licensure and certification can be tricky. As such, you need to start with a basic understanding of what your line of work requires, and work from there.

An explanation of certification

In our quest to understand the difference between licensure and certification, it’s important to define each term. Let’s begin with certification.

Certification is an official document that confirms certain characteristics of a person, an object or an organization. For a professional, certification is a document that proves you have attained a certain level of knowledge or achievement that qualifies you for your line of work. Depending on what you do for a living, this can be through a single course, or a long-term study program. For example, you can get very specific levels of certification in a single four-hour session, while other certification programs, like those offered by universities, may take years.

Professional certification is generally required for landing a huge range of jobs. These include architecture, engineering, event planning and Pilates. That means you must have proven certification to work in these fields. Other fields like hospitality, marketing, and dance also have recommended certification programs. The difference here is that, while certification may help in landing a job, you do not need a certificate in order to work in these fields.

If you're working for yourself, certification also proves your credentials to customers. That is, it shows customers that you are a highly trained professional, which in turn can boost your business. In addition to proving your professionalism, certification also opens many doors. For example, you need certification to join many professional associations, which again, can help increase your credibility with customers.

An explanation of licensure

Now that we understand the need for certification, we need to establish what is the difference between certification and a license? For this we need to define licensure.

Basically, licensure is as it sounds –  that is, it is proof that you are licensed to work in your profession. Unlike certification, licensure is a legal designation, with a clear set of requirements for each vocation. That means if you don’t have the right level of licensure for your job, you may be fined. In some cases, you could even risk jail time, if you are putting public safety at risk.

As such, many occupations that require certification also require licensing. For example, if you’re a doctor, you will need certification to show that you have completed your studies. But you will also need licensure in order to legally operate.

Sometimes, however, the laws around licensing are flexible. In these cases, people can work in a field with or without licensing. Think about what you might call yourself as a massage therapist. There’s a difference between licensed and certified massage therapist. If you do not have a license, you would call yourself a massage therapist. If you do have a license, you would call yourself a licensed massage therapist.

Semantics aside, most small businesses need a license and possibly permits to operate. Not having the required licensing could get you in serious trouble with the law. That means you need to check your local legislation to determine if you need licensing to practice your profession.

Business certification

Difference between licensure, certification and registration

Another thing you should note, in addition to there being a difference between licensure and certification, is the difference between licensure vs certification and registration. That is, in addition to having professional licensure and/or certification, you may also need to register your business in order to legally operate. Make sure to check the laws on the local, state, and federal level to cover your bases. If you need help, you can also hire an accountant or lawyer to do the paperwork for you.

Other things you need to legally run your business

In addition to any required licensing or certification, you need to keep a few legalities in mind when running your business.

  • Insurance – This is a biggie. You absolutely must carry general liability insurance in most professions in order to operate. In addition, you will need workers’ comp if you employ people, commercial auto insurance if your business involves road travel, and even health insurance in many cases.
  • Contracts – While it may seem like a hassle, it is very important that you sign a contract with each and every customer. A contract is your way of setting mutual expectations. It tells the client exactly what service he or she will be receiving. And it sets the terms for how much you’ll be paid and when. Don’t be afraid of the admin work involved. There are many resources available online to help you write up basic contracts, or you could consult with a lawyer.
  • Waivers – It is highly recommended that you have customers sign a waiver. This is particularly true for certain types of work. For example, a massage therapist or a cosmetologist need to know if a customer has underlying medical issues before working together. This protects them both in the event of complications that may arise from treatment.
  • Tax payments – All independent professionals and small businesses must pay taxes. The details are a bit complicated so you might want to hire a professional accountant to help. Or if you prefer, read up on the Small Business Administration website. It’s a great guide for federal and state tax details.

In other words, the difference between licensure and certification is just part of the story when it comes to building your business. Other technicalities you will need to consider include things like local marketing laws, privacy laws and even intellectual property laws. All of these factors, again, depend on where you’re working and your exact field. So while it may seem like a lot of work to cover your basics, the truth is, doing the legwork right saves you time and money in the long run – which in turn helps your business thrive.

Next Insurance Staff
By Next Insurance Staff

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