# Small Green Business: How Can You Protect It?

- Link: https://greenlivingguy.com/2022/11/small-green-business-how-can-you-protect-it/
- Published: 2022-11-22T19:29:54-05:00
- Author: greenlivingguy

Many small green businesses [fold](https://greenlivingguy.com/2023/01/making-every-aspect-of-your-business-more-sustainable/)
early in the game. That’s because of a lack of knowledge and ensuing poor decisions
that the owners have made. With the right advice, you can avoid these pitfalls. 
We discuss some of the key aspects small [business](https://greenlivingguy.com/2020/01/greener-future-for-business/)
owners need to pay attention to. All so that the [best decisions](https://greenlivingguy.com/2023/05/sustainability-business-strategies-comprehensive-guide/)
in their particular circumstances can be taken.

### What Is the Best Legal Structure for Your Business?

The first point of impact for your small green business. Once you have chosen a 
legal structure it’s essential. For this  is how it affects your federal and state
tax burden. Sole proprietors, [S corporation](https://greenlivingguy.com/2023/07/sustainability-board-members-c-suite-goes-green-saves-green-with-educators/)
owners, and partnership owners claim income as personal and cannot sell stocks or
fundraise. 

A C corporation structure separates an owner’s income from the business income. 
An LLC (limited liability company) is only recognized by the state and not by the
federal government Instead, C corporations are accepted by federal agents. Both 
LLCs and C corporations have liability protection. Articles of incorporation must
be filed by corporations. They are required to submit various reports to the government
at certain times. They are compelled to have a set number of board meetings.

You will need an employer identification number to obtain business licenses, regardless
of the structure, so this decision must be made as early as possible. It is not 
easy to change your business’s legal structure later, [but it can be done](https://www.thebalancemoney.com/want-to-change-your-business-legal-type-here-s-how-398665).

![Small green business](https://i0.wp.com/greenlivingguy.com/wp-content/uploads/
2019/03/architecture-blue-building-business-41170.jpg?resize=780%2C519&quality=52&
ssl=1)

## Small Business Insurance

Small businesses face many potential risks. For example, a fire can destroy your
business [premises](https://greenlivingguy.com/2015/02/new-appraisal-institute-form-helps-analyze-new-green-commercial-properties/)
and building, your stock, and your equipment. Insurance is the shock absorber that
allows you to repair damage and recover your losses so that you can be up and running
as soon as possible. 

We are going to cover the two most important types of insurance that protect you
from potential liability claims. These are [general liability insurance and workers’ comp](https://www.nextinsurance.com/comparison/general-liability-vs-workers-compensation/)
and both are needed as they cover different aspects of your business.

General [liability](https://greenlivingguy.com/2018/03/mercury-insurance-names-most-affordable-electric-vehicles-to-insure/)
insurance covers property damage, physical injury, and personal injury. Property
damage is for events such as an employee dropping a load of bricks on a customer’s
vehicle. Physical injury can be sustained on your property as a result of negligence,
e.g., by not putting up ‘wet floor’ signs. Personal injury refers to aspects such
as [slander and libel](https://examples.yourdictionary.com/examples-of-slander.html),
damage to reputation, and copyright infringement.

Workers’ compensation pays for an employee’s needs when they are injured or develop
a disease due to working conditions. It includes death benefits, permanent injury,
retraining if they can no longer perform their previous job, lost wages during recovery,
and medical expenses.

You may want to consider additional cover in case of fires, floods, etc.

### Protecting Against Customers Who Default

When you encounter a potential business-to-business ([B2B](https://opentext.wsu.edu/marketing/chapter/5-4-types-of-b2b-buyers/))
customer, you should perform a credit check before doing business with them. You
don’t want to have customers who default on payments. Get a contract for every job
or service. This is your legal proof, and it may enable the courts to force the 
company to pay you for work done. Specify full details of the job on the contract.

In business, what you don’t know CAN hurt you. Make sure you have a good legal practitioner
to advise you.

![author avatar](https://secure.gravatar.com/avatar/df91669667126e1290c21ee0342c386e2da19d588d4d9ca6560bd82ed59a9641?
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 greenlivingguy

 The Green Living Guy, Seth Leitman is an independent power producer, a green living
expert, and Editor of the McGraw-Hill, TAB Green Guru Guides. Seth is also an Author,
Radio Host, Reporter, Writer and an Environmental Consultant on green living. The
Green Living Guy writes about green living, green lighting, the green guru guides
and more. Seth's books range from: # Build Your Own Electric Vehicle by Bob Brant
and Seth Leitman (2nd and 3rd editions) # Build Your Own Plug-in Hybrid Electric
Vehicle by Seth Leitman # Build Your Own Electric Motorcycle by Carl Vogel # Green
Lighting by Seth Leitman, Brian Clark Howard and Bill Brinsky # Solar Power For 
Your Home by David Findley # Renewable Energies For Your Home by Russel Gehrke #
Do-it-Yourself Home Energy Audits by David Findley # Build Your Own Small Wind Power
System by Brian Clark Howard and Kevin Shea # and more green living books to follow.

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