When converting a number to Scientific Notation, the first step is:
Find up to 4 Significant Digits.
If I have the number $250003456$, which $4$ numbers would be the "significant digits", $2500$ or $3456$? What is the rule behind which numbers would be significant or not, especially with decimal values?
On
I like to think of significant digits as indicating the accuracy in terms of how many numerical digits you can be sure are correct.
E.g. if you have a ruler that has marks for millimeters, then you might think that your measurements are accurate up to the millimeter. Of course, you could approximate if the length you are measuring falls between two millimeter markings, say you measure an object that is 12 cm and just a tiny bit beyond 2 mm long, so it's between 12.2 cm and 12.3 cm but closer to 12.2 cm. You could "eyeball" and guess about 12.21 cm, but you really don't have that accuracy since there are no additional markings to be sure. So you can record this measurement, but really, you only have 3 significant figure accuracy. So should record it as 12.2 cm. You would not want to say 12.20 cm because that is four significant figures and implies that you have the additional resolution to see accurately in 0.01 cm increments.
In other words, if your measuring stick has 1 cm, 0.1 cm, and 0.01 cm markings, then you can claim 12.20 cm as the accurate measurement, but not if your measuring stick only has 1 cm and 0.1 cm markings.
Note: This idea of measuring stick markings is just for illustrative purposes and does not necessarily indicate an actual rule for recording data that scientists use.
And of course as already explained, in scientific notion, $x_1x_2\ldots x_k.x_{k+1}x_{k+2}\ldots x_{k+n} (10)^n$ indicates $k+n$ significant digits. The $x_i$ can be anything $0$ to $9$, except that $x_1\neq0.$ Actually, $x_1=0$ is allowed but we only start counting significant digits at the leftmost nonzero digit.
Examples:
$001.020(10)^{-5}$ is 4 sig figs.
$101.020(10)^{-5}$ is 6 sig figs.
$123.000(10)^k$ is 6 sig figs.
$5.001(10)^3$ is 4 sig figs.
$5.100(10)^3$ is 4 sig figs.
$5.1(10)^3$ is 2 sig figs.
"Significant digits" is actually an abbreviation for "most significant digits" meaning the highest order digits. In your example, $2.500\times10^5$ expresses the number $250003456$ accurately in scientific notation with four significant digit precision.