Besides a fictitious business license, which legalizes your business name, you'll also need to apply for a number of other city or county licenses and permits. First up is a business license. The license fee is nominal and so is the paperwork. Where thing can get sticky is that, once you've applied for the business license, the city checks how you fit into its zoning and parking ordinances.
Which brings us to the all-important issue of zoning. Zoning ordinances vary tremendously from one locale to another, and are typically regulated by the city or county planning commission or planning board. Some municipalities, operating under the quirky assumption that boarding houses and tourist homes are still common, will consider a homestay (a tiny B&B that's used for supplemental income and usually doesn't advertise) or smaller B&B a residential business and let it go at that. Others feel that any bed and breakfast is a commercial enterprise that belongs in a business district. Still others, unfamiliar with the B&B concept, decide on a case-by-case basis.
Some municipalities include other issues besides location in their zoning ordinances. Some limit the number of days guests can stay per visit--typically seven or 14 days--as a means of insuring that hey remain short-term guests instead of long-term tenants. Some cities limit the number of guest rooms allowed in a residential neighborhood. Some prohibit cooking facilities in guest rooms, which means no kitchenettes allowed.
If your B&B is located in a business district, you'll probably pass with flying colors. But if your neighborhood isn't zoned for a bed and breakfast, you'll have to apply for a variance or a conditional use permit.
This generally means you appear before the planning commission as a star in your very own courtroom drama. You explain how your business will operate and why it won't change or harm the tenor of the neighborhood. If your town is B&B-oriented, with a number of bed and breakfasts already in operation, you shouldn't meet with much opposition. But if you'll be a pioneer, you may also need to explain how bed and breakfasts actually improve neighborhoods.
Riding shotgun with the question of zoning are parking and signage issues. Most cities stipulate that businesses allow adequate off-street parking for a set number of cars, typically one space for each guest room. They'll also want extras paces for your family vehicles. Depending on your specific location, you may be able to get around this by suggesting that guest can park in nearby public lots or in business parking lots or on the street after hours.
As for signage, you may not be allowed to post any sign at all if you're in a residential area. Which is fine if you'll go the homestay route and/or don't want any walk-in traffic. But if you're planning an inn0sized operation that will attract passersby, you'll have a hard time making your presence known.
Even in business districts, some municipalities can get sticky about signage. They may insist that your sign be placed a set distance back from the curb or be placed only directly on your building. For most B&Bs, which prefer discreet, low-key signage anyway, this isn't a problem. But it is a matter you should check into before you have a sign made.