Money Matters: A Step-by-Step Guide to Improve Financial Literacy for Businesses

August 11, 2025

Taking the leap into entrepreneurship is an exciting journey, but it comes with financial responsibilities that determine your business's future. As 20% of new businesses fail within their first year, and nearly half failing within five, developing a solid foundation in financial literacy is essential to helping your business’s long-term success. Common pitfalls, such as not having a clear business plan, failing to project expenses accurately, and poor marketing strategies, often contribute to these early closures.

Ridgewood Savings Bank’s free online resource Small Business Essentials can help you navigate these challenges with key insights designed specifically for small business.  Spanning topics from managing cash flow to understanding tax obligations, this guide can help entrepreneurs avoid costly mistakes and focus on sustainable growth. Here’s how:

1. Develop a Strong Business Plan

Businesses with a plan grow 30% faster than those without one. A business plan is more than just a document; it's a roadmap that outlines your company’s financial, operational, and marketing goals over a specific period of time. This plan isn’t static—it should evolve with your business.

A strong business plan:

• Establishes a solid foundation by defining a clear mission, along with well-defined goals and objectives tailored to your business.
• Helps you make informed decisions with respect to financial projections and statements, and data-driven decisions.
• Proves your business's value: Investors and lenders want to see a solid business plan before they provide funding.
• Attracts talent: In a competitive hiring market, some candidates will want to know your company is viable before they will consider joining your team.
• Serves as a benchmark for future growth as it will generally include an executive summary, a company description, marketing strategy, market analysis, and financial details.

2. Manage Your Cash Flow Effectively

Cash flow management is crucial for any business. At Ridgewood, we provide tools like electronic money transfers and remote deposit capture, so you can monitor and manage your cash flow efficiently.

Key Cash Flow Management Tools

Online Banking: Track account activity, generate payments, and transfer funds seamlessly.

Mobile Banking: Deposit checks, pay bills, and manage your finances on the go using your phone or mobile device.

By staying on top of your business’s inflows and outflows, you’ll have the financial agility needed to help navigate challenges and seize opportunities.

3. Build and Maintain Good Business Credit

Building good credit is fundamental to accessing capital when your business needs it most. Ridgewood Savings Bank offers eligible borrowers business credit cards and lines of credit, giving flexible options to manage expenses and invest in growth. To help maintain good credit:

• Pay bills on time.
• Keep your credit utilization low.
• Regularly check your business credit report for accuracy.

Good credit opens doors to more favorable lending terms, helping your business grow sustainably.

4. Understand Taxes and Deductions

Navigating taxes can be overwhelming for any business owner, but with the right preparation, you can help reduce your tax burden¹. Keep detailed records of expenses, such as office supplies, employee wages, and travel, to maximize your deductions. Ridgewood partners with Paychex to help streamline your payroll services, helping you stay compliant with payroll taxes and maintain accurate records.

5. Plan for Growth with Savings

Your financial plan should include savings for future expansion or unexpected expenses. Ridgewood’s Business Savings and Money Market accounts offer opportunities to earn interest while keeping funds accessible. Whether planning for future expansion or unexpected repairs, having a financial cushion helps strengthen your business’s resilience.

6. Seek Professional Financial Advice

Navigating business finances can be complex, but Ridgewood Savings Bank’s Business Banking team is here to help guide you. From everyday banking needs to long-term goals, our team can help you find the right solutions for your business.

7. Explore Banking Services Designed for Small Businesses

No business can operate without banking services, and choosing the right financial partner is essential. Whether you need funds to launch or grow, a payroll system for employees, or merchant processing services, Ridgewood offers a range of products tailored to your needs:

• Business Checking and Savings Accounts: Manage daily transactions and saving for future growth.
• Business Credit Cards and Loans: Access credit for short-term needs or long-term investments for eligible borrowers.
• Merchant Processing Systems: Obtain seamless payment acceptance from customers.
• SBA (Small Business Administration) Loans: Eligible borrowers can support a wide range of goals, from starting a new business to seizing growth opportunities, offering greater flexibility with lower down payments and longer terms.

Some Final Thoughts: Take Control of Your Business’s Financial Future

Financial literacy is the foundation for long-term success. By creating a solid business plan, managing cash flow, maintaining good credit, and planning for growth, you can set your business on a path to success. Ridgewood Savings Bank is here to support you every step of the way, offering the tools and expertise needed to thrive. Ridgewood has a strong reputation for serving businesses, and our services are designed to help meet your unique business needs.

Let Ridgewood Savings Bank help you grow your business—today and for the future. Check out the full Small Business Essentials guide here.

This guide is provided for informational purposes only. The information is subject to change and may not be applicable to your personal situation.  Links to third-party articles and/or websites are for general information purposes only.

1Please consult a tax advisor as appropriate. Member FDIC