Business license requirements vary by location. One thing you absolutely will need to do is register with the state for sales tax, and pay it accordingly. In KS, I even have to pay sales tax on session fees, as they are said to produce "tangible product". Your state may vary. The most important thing to do is know the rules, and follow them. Claim all your income on income tax as well.
Save yourself alot of headache from the get go and spend some time and money and draft a formal contract. Included in the contract should be every single viable outcome to the photo session. All the expectations, everything that is included and what is not included, and include a model release. You need a model release anytime you intend to use your photos for commercial use, and using the photos for basically anything in conjunction to your business is commercial use. A lawyer should be part of this process.
Do you need insurance.....absolutely. Keep in mind that while you are doing these photo sessions, its reasonable to think that you will be directing people. If you are in a park, and tell someone to sit down on a completely reasonable looking bench, it breaks, and they break their arm. Who is liable? You told them to sit there, are you liable? Nobody really knows the answer, thats for the courts to decide if someone wants to sue, but you bet your butt that when that day comes, and I said when not if, you want insurance to take that fight up for you and not yourself, because it can bury you. I run multiple light setups alot, if my light stands fall and crack someone on the head (and while unlikely, it could happen) that is my fault, and my insurance would cover that.
Your final question, it depends on if you are in a public place. If you are on public property, then you have the right to take and sell any photographs you want with no model release. If at an event on private property open to the public, I think the rules would be the same (someone can clarify here if you are wrong). If you are at a private event (aka need a ticket for admission) then the event organizer must give you permissions to shoot. What you need a release for is to then put those shots on your website to promote your business, because that is commercial use. Not trying to be a downer, but if you are looking to make any real meaningful income from photography, I don't think shooting events and handing out cards is normally a very profitable venture.
You asked what to expect, and I can give you an idea. Photography and portrait photography in particular is an extremely competitive venue to get into. There are thousands of people, just like you, sitting in there houses right now at this very moment thinking about the same thing you are, as well as a horde of established pro's out there who are very good at what they do, and an even bigger horde of people out there doing it who have little to know experience and maybe limited camera skills, who may or may not be following the rules and working on a level field. Ask this of yourself and your photos....what is special about them. What sets you apart from the people you will be competing with. What do you do better? If you struggle coming up with an answer......your business will struggle. Its very VERY easy to work for below minimum wage in this business when you add up your time, your expenses. In my opinion, you either need to find your cost of doing business and set up things so you make good money, or keep it as a hobby. I wouldn't want to work this hard for minimum wage or less, but that decision is ultimately up to the people workign in the business.
Good luck! If you make it work, its a fun, fast paced, and exciting job, but its hard!
