This can get complicated quickly. Businesses are generally licensed by state and local gov't. Most however don't require sole proprietors to register since they

This can get complicated quickly. Businesses are generally licensed by state and local gov't. Most however don't require sole proprietors to register since they would generally be subject to the same tax as an individual. My instinct would be to get started now. Complicating factors may include: product/Svc liabilities, IP rights/protection, your bookkeeping system, local rules & restrictions.