Opening a business in a commercial space: the steps, start to finish
The steps from the first search to opening day include the zoning check, the lease, the architect, permits, the fire department, signs, the occupancy certificate and the licenses. Restaurants, day cares, salons and bars need extra approvals.
Most openings in an existing commercial space follow the same order: confirm the use is allowed, find and check the space, sign a lease with the right contingencies, design the build-out, get permits, build and pass inspections, then get the occupancy approval and the business license. Some uses add a state or county license on top: a restaurant needs a food permit, a day care needs a state child care license, a bar needs local and state liquor licenses. The costly surprises come from approvals discovered after the lease is signed.
Sixteen steps from the search to opening day
Who usually handles each step, and when. Several run at the same time.
| # | Step | Who | When |
|---|---|---|---|
| 01 | Write down what the business will do | You | Before you look |
| 02 | Check that the use is allowed at the address | You and your broker; the village confirms | Before you tour |
| 03 | Find and tour spaces | Your broker | |
| 04 | Check the building | Your broker, architect and contractor | Before the letter of intent |
| 05 | Meet the village | You and your architect | Before you sign |
| 06 | Negotiate the letter of intent, with contingencies | Your broker | |
| 07 | Get a special use or variance, if the use needs one | You, your attorney and architect | Before the lease, or during its contingency period |
| 08 | Sign the lease | You and your attorney | |
| 09 | Set up the business: company, taxes, insurance, utilities | You and your accountant | Alongside steps 6 to 12 |
| 10 | Design the build-out | An Illinois-licensed architect | After the lease, sometimes before |
| 11 | Apply for permits: building, fire, health | Your architect or contractor | |
| 12 | Build out and pass inspections | Licensed contractors; village and fire inspectors | |
| 13 | Order the sign | A sign company | Early, because fabrication takes time |
| 14 | Final inspections and the occupancy approval | Village, fire department, health department | |
| 15 | Business license and any state license | You | Before you open |
| 16 | Open, then keep up renewals and annual inspections | You |
Find the space and protect the deal
Most of the expensive problems can be found here, before you are committed.
Write down what the business will do
Describe what happens in the space. Include how many people work there and visit at once, the hours, and whether you cook, store chemicals, work on vehicles or teach classes. The village classifies the use from that description, and the classification sets the zoning, the parking count and the building code rules.
Check the zoning
Find the address’s zoning district and whether your use is permitted there, needs a special use, or isn’t listed. Start with the Zoning Lookup, then get the village’s answer in writing. A use that’s allowed down the street can need a hearing at your address. See common zoning mistakes.
Check the building
A space that housed a different kind of business can need upgrades for yours. Under the Illinois Plumbing Code, a building changed from one use to another is treated as new for plumbing, which can mean more restrooms. Ask about sprinklers and the fire alarm, the restroom count and accessibility, and the entrance. Ask about electrical service, heating and cooling capacity, gas, and a grease interceptor for food or floor drains for vehicle work. Include ceiling height, loading, and the parking the zoning code requires for your use.
Meet the village
Many villages will meet before you apply. Bring a sketch of the layout and ask which permits and inspections apply. Find out which fire department or fire protection district reviews the plans and whether the health department is involved. Ask how the occupancy certificate and business license work, what they cost and how long each review takes.
Put contingencies in the letter of intent
Make the lease depend on the approvals you need, such as zoning or a special use, permits and any state license, each with a deadline and a way out. Tie the rent start to the permits or the opening, or size the free-rent period to the approval timeline. Settle the landlord’s work, any improvement allowance, the landlord’s signature on village applications, sign rights, hours and parking.
Plan for a hearing if the use needs one
A special use, variance or rezoning goes to a public hearing. State law for villages that aren’t home rule calls for newspaper notice 15 to 30 days before the hearing; the plan commission or zoning board then makes a recommendation and the village board votes. Home-rule towns can set their own procedures, so read the town’s zoning ordinance. Budget months, not weeks.
Sign the lease
Have a real estate attorney review it, and check that the contingencies, rent start, use clause and sign rights from the letter of intent made it into the lease.
Company, taxes, employees, insurance
Handle these while you work through the lease and the design.
Form the company
File with the Illinois Secretary of State before you sign the lease in the company’s name. A corporation or LLC that does business under another name files that assumed name with the Secretary of State too.
Register for state taxes
Register with the Illinois Department of Revenue on MyTax Illinois before you buy, sell or hire.
Employees
Open an unemployment insurance account with the Illinois Department of Employment Security within 30 days of start-up, and carry workers’ compensation insurance from the first employee, part-time included.
A sole owner or partnership using a business name
File the assumed name with the county clerk (Lake or Cook) and publish the notice once a week for three weeks.
Insurance and utilities
The landlord will want proof of the coverage the lease requires before you get keys. Transfer electric, gas and water early. For new or upgraded electric service, you’ll be asked for the electrical permit number.
The architect, the codes and the permit set
What the drawings have to cover before the village will issue a permit.
Hire an Illinois-licensed architect
Illinois’s Architecture Practice Act covers commercial buildings, with no size or cost exemption. The exemption that matters to a tenant is narrow: interior work with no life-safety or structural change. A building department can’t accept drawings for work that needs an architect unless they carry an Illinois architect’s seal. Work that changes exits, fire protection or structure falls under the Act; ask the village where it draws the line for your plan.
Design for accessibility
The Illinois Accessibility Code applies to alterations in space used by the public or by employees. Altering a main area can require upgrades to the route to it, such as the entrance and restrooms, up to 20% of the alteration cost. Plans for work costing $50,000 or more carry an Illinois architect’s statement that they comply.
Meet the energy code
The Illinois Energy Conservation Code applies to commercial renovations statewide, to the parts you alter, including in towns that have no energy code of their own.
Get the landlord’s approval
Check whether the lease requires the landlord to approve the plans before you apply; many do.
Apply for the permits
The building department reviews the plans for building and zoning. Electrical, plumbing and mechanical work is permitted with it or separately. Sprinkler and fire alarm changes and kitchen hood systems need fire permits, reviewed by the fire department or fire protection district. A food business also goes through the health department’s plan review.
Use licensed trades
Plumbing is done by state-licensed plumbers. Sprinkler contractors are licensed by the State Fire Marshal and fire alarm contractors by IDFPR.
Inspections and the sign
The work is checked as it goes and again at the end.
Inspections in stages
Inspectors check the work before walls and ceilings close (framing, electrical, plumbing, mechanical) and again at the end. The fire inspector tests sprinklers, alarms and any hood system. Schedule inspections ahead so the contractor isn’t waiting.
Signs
Get the landlord’s sign approval, then the village sign permit; an illuminated sign also needs an electrical permit in most towns. A sign for a business on the same property needs no IDOT permit, but state law bars flashing, oscillating or rotating lights within 200 feet of a public highway, which matters for animated message boards. Order early because fabrication takes time.
The occupancy approval and the business license
The last approvals before you open, including whether an office needs them.
What the occupancy approval is
It is the village’s sign-off that the space can be used for your business. Towns call it a certificate of occupancy, an occupancy permit, a certificate of zoning compliance or a business occupancy certificate. It usually follows the final building and fire inspections, and in some towns the health department’s.
Does an office need one?
Under the building code most suburbs adopt, an office replacing an office with no permitted work isn’t a change of occupancy, so the code alone doesn’t call for a new certificate. A build-out that needs a permit usually ends with final inspections and a certificate, and a change to a different use brings one in: retail to office, and sometimes office to medical clinic. Village ordinances go further. Of the 72 village codes reviewed for this guide, 7 say in writing that a new tenant or occupant needs a certificate or zoning permit even when the use stays the same: Elk Grove Village, Green Oaks, Lake Bluff, Lindenhurst, Round Lake, Schaumburg and Vernon Hills. 9 more use wording that likely reaches a new tenant: Buffalo Grove, Des Plaines, Evanston, Hawthorn Woods, Lakemoor, Mundelein, Park City, Wilmette and Winnetka. Where a town has such a rule, none of the codes reviewed carves out offices. Others reach every business through the business license, with a fire inspection before it issues. Ask the village before you set a move-in date.
The business license
Villages differ: some license or register every business, some license only listed trades, and some have no general license. Where there is one, it often comes after the occupancy approval and a fire inspection.
After you open
Expect license renewals, annual fire inspections, and health inspections for food businesses.
Restaurants, day cares, salons, bars and others
The added approvals for each use, who issues them and when to start. Offices and most retail need only the village approvals above.
| Use | What it adds | Who issues it | Start |
|---|---|---|---|
| Restaurant, café, bakery or food store | A food permit and an inspection before opening, after a plan review of the kitchen. A kitchen that sends grease down the drain needs a grease interceptor. A certified food protection manager is in charge whenever food is prepared or served, food handlers train within 30 days of hire, and restaurant managers also take allergen training. | Lake County: the Lake County Health Department (some towns add their own license on top). Suburban Cook: the village’s own health or environmental health division in the towns checked; the Cook County Department of Public Health issues food permits in unincorporated Cook. | Before the build-out: the plan review comes first. |
| Bar, or a restaurant that serves alcohol | A local liquor license from the village, then the Illinois Liquor Control Commission license; the state asks for a copy of the local license. On-premises service needs liquor liability (dram shop) insurance, and servers take BASSET training within 120 days of hire. | The village’s liquor commissioner, then the Illinois Liquor Control Commission. | As soon as you pick the site. Ask the village whether a license is available in your class. |
| Video gaming | An Illinois Gaming Board location license, up to six terminals. A bar or restaurant qualifies only if it pours alcohol for drinking on site and holds both liquor licenses. It can’t be within 100 feet of a school or a place of worship, and a village can ban video gaming. | Illinois Gaming Board. | After both liquor licenses are issued. Check the village’s position before you sign. |
| Day care (early care and education center) | A state child care license. Since July 1, 2026 it comes from the Illinois Department of Early Childhood, which took over from DCFS. The building must pass fire and health approval before children are served; infants and toddlers must be at ground level; at least 35 square feet of activity space per child age 2 and up; an outdoor play area; a radon test within the last 3 years. New centers start on a 6-month permit and can’t serve children until it is issued. | Illinois Department of Early Childhood. | Before you sign: the space rules decide whether a site works. The department recommends an orientation. |
| Salon, barber shop, nail or esthetics | A state salon or shop registration for each location, and a license for each stylist, barber or technician. A med spa can’t run on a salon registration. | Illinois Department of Financial and Professional Regulation (IDFPR). | Before you open. |
| Massage | Each therapist holds a state license. The state doesn’t license the business itself; some villages license or inspect massage businesses. | IDFPR for therapists; the village for the business, where it has a rule. | Before you open. Ask the village about its own license. |
| Tattoo, piercing, permanent makeup | A body art establishment registration and a state inspection, which the state says takes about 4 to 6 weeks. The build-out needs at least two sinks: one in the restroom and one in the work area for artists only. | Illinois Department of Public Health. | Apply as the build-out finishes; plan the sinks in the drawings. |
| Medical: surgery center, X-ray, pharmacy | A surgery center needs a Certificate of Need before the state health department will review it. X-ray equipment is registered with the state before it is used, and the room needs shielding. A pharmacy is inspected by the state before its license issues. | Health Facilities and Services Review Board and IDPH (surgery center); IEMA-OHS (X-ray); IDFPR (pharmacy). | Surgery center: before the lease. X-ray and pharmacy: during design. |
| Auto repair or used car sales | No state shop license for repair, but the floor or trench drains must run to a gas and oil interceptor. A used car dealer needs a Secretary of State dealer license and a $50,000 bond per location; first-time dealers take 8 hours of state training, and the site needs an office, posted hours and a surfaced lot or an indoor showroom. | Illinois Secretary of State (dealers). | Repair: in the plumbing drawings. Dealer: pick a site that meets the rules before you apply. |
| Gas station | Permits from the State Fire Marshal to install underground tanks and piping, trained tank operators, and state inspection of the fuel pumps. | Office of the State Fire Marshal; Illinois Department of Agriculture (pumps). | Before construction. |
| Tobacco or vape shop | A state tobacco retailer license for each location ($150 a year). From November 12, 2026, retailers can’t sell vapes containing hemp. Some villages add their own license. | Illinois Department of Revenue. | Before the first sale. |
| Cannabis dispensary | The state issues dispensary licenses in application rounds, not on demand, and a dispensary can’t be within 1,500 feet of another one. Villages can limit or prohibit cannabis businesses, often through a conditional use. | IDFPR; the village. | Hold a license or conditional license before you commit to a site. |
| Pet shop, kennel, dog day care | A state Animal Welfare Act license after a preliminary inspection. A boarding kennel that isn’t staffed whenever animals are there needs a fire alarm that calls emergency responders, or sprinklers. A pet shop may sell dogs and cats only from shelters or animal control. | Illinois Department of Agriculture. | Plan the alarm or sprinklers in the drawings; apply before opening. |
| Gym or fitness studio | An AED and a trained AED user on staff during staffed hours, a medical emergency plan filed with the state, and a CPR-certified person on site during staffed hours. Money from memberships sold before opening is held in escrow until the certificate of occupancy. Trampoline parks and climbing walls need a state labor department permit; apply at least 30 days before opening. | Illinois Department of Public Health; Illinois Department of Labor (attractions). | Before presales start. |
| Event space, church, large classes | A posted occupant load near the main exit, and the fire code’s place-of-assembly permit. The occupant load also drives the exits, restroom count and whether sprinklers are needed. | The fire department or fire protection district. | In the design. |
| Career or trade school | A Permit of Approval for private business and vocational schools, and approval of each program. | Illinois Board of Higher Education. | Before you enroll students. |
What owners can do to keep a tenant on schedule
A tenant’s approvals decide when the rent starts.
Rent starts when the tenant can open
A tenant who can’t get approved can’t pay rent for long. Before you accept a letter of intent, ask what approvals the use needs and how long they take. Use that timeline to set the free rent and the contingency dates. See what landlords should ask before accepting a tenant.
Have the building’s records ready
The last occupancy certificate, plans, the sprinkler and fire alarm records, and the parking count help a tenant’s architect and can speed up the village review. Expect to sign the tenant’s zoning and permit applications; villages often ask for the owner’s consent.
Resealing the parking lot
In Illinois, sealcoating, resurfacing or restriping an existing lot triggers the accessible parking rules of the Illinois Accessibility Code. Plan the accessible spaces and route before the work starts.
Common questions
Does an office need a certificate of occupancy?
It depends on the village. Under the model building code, an office replacing an office with no construction isn’t a change of occupancy. But 7 of the 72 village codes reviewed for this guide require a certificate or zoning permit for a new tenant even when the use stays the same, and 9 more use wording that likely reaches one; none of those carves out offices. A permitted build-out or a change of use usually brings the certificate back. Ask the village before you set a move-in date.
Do I need an architect for a small build-out?
Usually. Illinois has no size or cost exemption for commercial buildings. Only interior work with no life-safety or structural change is exempt, and the village decides where that line falls for your plan.
How long does a special use take?
Months. State law for villages that aren’t home rule calls for newspaper notice 15 to 30 days before the hearing, then a recommendation from the plan commission or zoning board and a village board vote. Home-rule towns can set their own procedures.
Who licenses day cares in Illinois now?
The Illinois Department of Early Childhood, since July 1, 2026. It took over child care licensing from DCFS. The building still needs fire and health approval before children are served.
Who issues a restaurant’s food permit?
In Lake County, the Lake County Health Department; some towns add their own license. In the suburban Cook towns checked for this guide, the village’s own health or environmental health division; the Cook County Department of Public Health issues food permits in unincorporated Cook.
Can I sign a lease before I have permits?
Yes, if the lease depends on the approvals you need, with deadlines and a way out, and the rent start matches the approval timeline.
Opening a business in Lake County or the north suburbs?
Tell me the use, the size and the towns you’re considering. I’ll check the zoning before you tour and point out the approvals a space needs before you sign.
Jason Bitton is a commercial real estate broker with RE/MAX Commercial in Libertyville, IL — #1 RE/MAX Commercial Broker in Illinois (2022, 2024, 2025) — serving Lake County, the North Shore, the O’Hare corridor, and the Chicago suburbs.