Why Financial Education Matters for Small Business Success

Every entrepreneur – no matter how small their business and regardless of the industry – needs a strong understanding of finance and accounting. At the most basic level, business owners need to keep track of how much everything costs versus how much money is coming in. For entrepreneurs to grow, they need to understand different banking options and how to use tools like business credit to save money or grow. 

Unfortunately, many business owners lack strong financial literacy. One 2024 study by Intuit found that only 31% of male business owners and 15% of female business owners were very confident in their financial literacy before starting their companies. 

The Pasadena Economic Development Corporation, in partnership with PNC Bank, is looking to change that. 

Business owners can attend a free, three-part Small Business Success Series to grow their financial know-how. These sessions can give local entrepreneurs, franchisees, and business owners the resources to make money decisions confidently. 

Financial education is essential. Here’s how businesses can grow with the right financial insights and partners offering support along the way. 

Entrepreneurs Can Get the Funding They Need

The vast majority of entrepreneurs self-fund, meaning they draw from their existing savings to start their businesses. One survey by Gusto found 84% of solopreneurs (solo business owners) personally contributed money to launch their business. Conversely, only 29% had a business credit card and 8% had a business loan.

However, not every would-be entrepreneur has access to enough capital to launch a business. Even if they do, they might not have the funds to expand from an in-home business to a physical storefront.

“When we meet with entrepreneurs, they often have questions about funding,” says Arturo Marquez, Director of Economic Development for the Pasadena EDC. “They might already have money problems or need help expanding their operations. We do our best to help them explore their options to demystify funding channels.” 

That’s why the first session of the Pasadena Small Business Success Series, which was held on July 27, covered funding. It reviewed options such as loans and lines of credit, along with the benefits of applying for grants and working with trusted partners like the Small Business Administration (SBA).

Business Owners Can Grow Their Credit 

Financial literacy in entrepreneurship can also help business owners grow their credit, therefore increasing their lending power. Businesses have credit scores, too, which are affected in similar ways as personal ones. Entrepreneurs can build their business credit by establishing a reliable payment history.

The second financial knowledge session, which is scheduled for Monday, August 24, covers everything related to business credit. It will help business owners learn how to check their credit scores, repair bad credit, and build good credit.

Even if you don’t need to rely on good credit now as a business owner, building your score could help you in the future if you need to take out a loan or secure other forms of financing for growth. It’s an investment in your future. 

Founders Can Make Plans for Growth

Having a clear picture of your business's financials can help you plan for the future, set growth goals, and even prepare for unexpected costs. You could possibly identify unexpected expenses you're overpaying for, spot opportunities to increase profits, and offer new services to customers.  

The third workshop on Monday, September 28, identifies products and services designed to help small businesses. You may discover that a high-yield savings account is a better option for your business model, or decide to apply for a business credit card.

Many entrepreneurs aren’t driven by a passion for accounting, and that’s okay. But opening a business means you need to be willing to learn all aspects of management, from balancing finances and filing permits to hiring and marketing. The goal of this free series is to give business owners more tools, resources, and connections to make confident decisions moving forward. We can’t make you a math wiz, but we can help you find people who are. 

Register for the Upcoming Workshops in English or Spanish  

Pasadena EDC and PNC Bank are hosting these business success workshops in both English and Spanish. Please register in advance so we know how many people to expect. The sessions are designed to be interactive, so you can ask questions and speak directly with local experts. Arrive curious and ready to learn. 
If you missed these sessions, keep up with Pasadena EDC. There might be more in the future or additional opportunities to grow your business acumen. 

Want to learn more about what we do and how we help local business owners? Reach out for a meeting today. We’re happy to learn more about you and potentially visit your business. We’ll see how we can help you grow or overcome your current challenges. Let’s talk.