Being licensed is a requirement for nearly all businesses, big or small. The purpose of business licenses is so that businesses can be identified and held accountable for their actions, to protect the interests of the public, and to track their revenue for tax reasons.
There are two kinds of business licenses: a general business license, and licenses that are specific to a type of business or service (plumbing, electrician, etc). At the very least, most businesses will need to get a general business license from their city, county, or state. However in some cases a business may need to get a general license from all three. General business licenses typically need to be renewed every year.
The requirements of the more specific business licenses can vary by region, so it's important to check in with your local city hall and county courthouse to see which license(s) your business may need. It's also important to check with your Secretary of State office to see which, if any, state business licenses you're required to have.