When the Los Angeles wildfires swept through Southern California in January, Barbara Shay lost much more than the building housing the cafe she owned.

Gone were the ingredients for menu items like grits or pancakes. Gone were the photos of icons ranging from former President Barack Obama to actor Richard Pryor that had lined the walls. Gone, too, were the decades of labor from Shay’s family.

“I am still in shock,” Shay said in an interview with CNBC. “It’s an emotional roller coaster — not just for me, but just for everyone.”

Shay is part of the diverse fabric of small business owners in Altadena, a town about 15 miles outside downtown L.A that was hard hit by last month’s blaze. As the community starts the yearslong rebuilding process, entrepreneurs like Shay are starting to chart their paths forward.

She plans to rebuild the 70-year-old Little Red Hen Coffee Shop and is evaluating the finances for opening up a temporary storefront or popups. The business spans generations: After following in the footsteps of her mother and brother in owning the business, she now works alongside her daughter and grandson.

But while many in Altadena’s entrepreneurial community remain optimistic about a recovery, multiple business owners described lengthy and difficult roads ahead.

Some businesses were burned entirely to the ground like Shay’s, while others face long-term displacement due to damage or smoke. For those fortunate enough to have brick-and-mortar properties still standing, they’re surrounded by what some have described in interviews as “ground zero.”

“It’s kind of unfathomable,” said Henri Wood, who owned a cannabis business called The Flourish Group that was burned down. “What was once just a vibrant, lively community is just completely gone.”

Altadena’s diversity cannot be understated. Census data shows that more than half of the population is people of color, with Latinos making up 27% of residents and Black people accounting for 18%.

Altadena has historically been known as a hub for Black families and businesses after being one of the only Los Angeles County areas exempt from redlining during the Civil Rights movement. The Associated Press found that the home ownership rate for Black people in Altadena now sits above 80%, which is nearly double the national average.

But Altadena’s business owners – many of whom also grew up and now raise families there – are worried the fires will leave that diversity in the rubble. Emeka Chukwurah, founder of community culture center Rhythms of the Village, said he’s concerned that the fires will expedite gentrification that was already taking place in the neighborhood.

Black residents accounted for more than 40% of the town’s population in 1980, according to Altadena Heritage. That proportion has been more than halved since then. Chukwurah has sold Altadena-branded merchandise to keep the community and its diversity from being forgotten by broader society.

“I’m hoping that we can keep the developers and those kind of people at bay so that we can hold on to what’s been built over generations,” Chukwurah said. “I’m hoping that this one will be in the history books as a resilient community, and that a large amount of us — or, if not, all of us — can stay to tell the story.”

Insurance agent Maricela Viramontes has seen how homeowners in the town at the foothills of the San Gabriel mountains are responding firsthand. Many are accustomed to fires due to its geographic location, she said, but they did not expect the destruction seen in January. The deadly fires caused more than $250 billion in damage and economic loss, according to an AccuWeather estimate.

Viramontes, who has lived in Altadena for nearly 25 years, woke up the morning after the fires in a shelter, as it was the only place her family could find to evacuate to. By early that morning, she began receiving calls while still at the shelter from clients looking for guidance on filing claims for lost property.

It’s the same paperwork that she, too, is filling out. Shortly after that day taking calls in the shelter, Viramontes learned that her home and car were both destroyed. Her office needs months of repairs for smoke damage.

“Everyone asks, ‘What can I do?, ‘How can I help you?,'” said Viramontes, who now lives and works out of her parents’ home nearby. “It’s so hard to answer that question when you don’t know.”

As businesses begin draft plans to clear their land and build new structures, they’re making plans for how to make ends meet in the short term.

Wood’s cannabis shop, for instance, has been connecting customers directly with providers while it figures out a long-term strategy. He called donations and mutual aid a “lifeline” for the business, which he said is excluded from several government aid programs because marijuana is not legalized federally.

Multiple entrepreneurs interviewed by CNBC said they are considering short-term rentals. They’re also considering business loans, though there’s concern about owing money with the financial outlook for their ventures so uncertain.

Through it all, these owners haven’t forgotten they are part of a community that’s stepping up to meet the moment.

Steve Salinas, who’s owned a namesake bike shop in Altadena for nearly four decades, has been repairing donated bicycles and re-homing them with community members. He’s gotten parts donated from other shops and monetary support through GoFundMe.

“Everybody sort of pitches in to help where they can,” said Salinas, who is looking for a short-term rental space after his store burned down. “People that have lost everything are donating their time and their resources and, most importantly, their connections to help other people in the community heal.”

In the same vein, Rhythms of the Village’s Chukwurah opened a free boutique with clothing and other necessities at his family home. It’s the temporary headquarters for the business, which has previously offered drum lessons and classes on Nigerian languages and African history, after their storefront burned down.

Chukwurah said he’s committed to keeping the business in the Altadena area. As he scouts out a new location for the center, he’s planning to purchase this time around instead of rent.

“The structures are down,” he said, “but the community spirit is up.”

— NBC News contributed to this report.

The Treasury Department has set a new deadline of March 21 for millions of businesses to fulfill a new reporting requirement on “beneficial ownership information,” after a court order allowed the federal agency to start enforcing the measure.

The Corporate Transparency Act, which Congress enacted in 2021, requires small businesses to disclose the identity of people who directly or indirectly own or control the company. The measure aims to prevent criminals from hiding illicit activity conducted through shell companies or opaque ownership structures, according to the Treasury.

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Businesses have suffered a degree of whiplash from the on-again-off-again deadlines to file BOI reports. A string of court orders had prevented the Treasury from enforcing the measure, only to then see courts strike down those rulings.

The U.S. District Court for the Eastern District of Texas on Feb. 18 lifted a nationwide injunction that had prevented the Financial Crimes Enforcement Network, known as FinCEN, which is part of the Treasury, from enforcing the Corporate Transparency Act.

The BOI reporting measure applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

Businesses and owners that do not comply with reporting rules are potentially subject to civil penalties of up to $591 a day, adjusted for inflation. They could also face up to $10,000 in criminal fines and up to two years in prison.

FinCEN left the possibility of further delays on the table even as it extended its previous reporting deadline by 30 days.

“FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided,” according to a Feb. 18 FinCEN notice.

FinCEN also said it would prioritize enforcement for businesses that “pose the most significant national security risks.”

Diversity, equity, and inclusion has become a flashpoint in corporate America, with a shifting political landscape and economic pressures reshaping how businesses approach these initiatives. Under the Trump administration, DEI programs are under increased scrutiny, and many large corporations have begun scaling back their investments in these efforts. Yet while big business retreats, small business owners are on a different path.

According to the CNBC|SurveyMonkey Q1 2025 Small Business Survey, many small business owners are not only maintaining their DEI commitments but also seeing tangible benefits from them. The data signals a clear divide amid the DEI backlash between big businesses in retreat and the steady, practical actions of small business owners.

When asked about their DEI initiatives in light of President Trump’s rollback of federal DEI policies, more than half (55%) of small business owners report implementing some form of DEI in their workplace. The most commonly adopted DEI practice among small businesses is implementing inclusive workplace policies — such as anti-discrimination and anti-harassment measures — with 38% of owners incorporating these into their operations. Other popular practices include inclusive hiring (31%), local community engagement (27%), and fostering an employee-driven workplace culture (26%).

Unsurprisingly, political affiliation plays a significant role in DEI adoption. While 80% of Democratic small business owners report incorporating DEI practices, only 32% of Republican small business owners do the same.

For small business owners who have embraced DEI, the data suggests the investment is paying off. A strong majority — 65% — report that DEI initiatives have positively impacted their overall business success, while only 6% say these efforts have had a negative effect.

Beyond general business performance, small business owners cite these specific benefits:

• 70% report improved workplace culture.
• 69% say DEI practices have enhanced their ability to recruit top talent.
• 60% note a boost in employee happiness.

These advantages are particularly critical for small businesses, which often face greater challenges in attracting and retaining talent compared to larger corporations. In a competitive labor market, fostering an inclusive and equitable work environment can be a differentiator that helps businesses build stronger, more committed teams, giving these small businesses a much-needed competitive edge. 

DEI practices are perceived somewhat differently among age groups. Younger business owners 18-34, report the highest levels of business success linked to their DEI efforts (54%), compared to ages 35-64 (39%) and 65+ (38%). This suggests that for the next generation of entrepreneurs, DEI is not just a cultural benefit but a strategic business decision.

While Washington and Wall Street grapple with a DEI backlash, small business is following a different path. The latest political and corporate moves have not trickled down for a straightforward reason: Main Street remain focused on what is effective for business.

—By Eric Johnson, CEO, SurveyMonkey

It’s no secret that large corporations are using generative artificial intelligence to get ahead — but many small businesses are finding ways to use this technology to their advantage, too.

To be clear, there’s still a large chunk (43%) of small businesses that have never even considered using gen AI in their operations, according to the 2024 State of Small Business survey of 1,300 respondents from small business software company Gusto. But nearly a third are experimenting with it while a quarter have already seen the upside, the survey found.

Nicholas Tremper, senior economist at Gusto, said the biggest benefit for small businesses using gen AI is getting ahead in the race for talent.

“Small businesses tell us that they continue to have difficulty hiring,” Tremper said. “Employees are looking for ways to use their skills most effectively in a business.”

Tremper said owners and employees are strapped for time and resources and wear many hats, but allowing workers to focus on the skills they want to use while gen AI takes the excess makes a workplace more attractive. That explains why gen AI-equipped small businesses are 45% more likely to fill open roles, Gusto reports.

Industries most impacted by labor shortages in the U.S. include education, health care, hospitality and professional services (which includes a wide swath, like legal services, landscaping, cleaning and waste disposal). Gusto has found that it’s some of these same industries where gen AI is most helpful. “These are businesses that are important to the local economies, but also important to the local culture,” he said.

Ric Nelson, founder and executive director of the non-profit disability advocacy organization Peer Power, based in Anchorage, Alaska, has a severe disability, cerebral palsy, which he contracted during an accident just after his birth. He wasn’t expected to survive, but now he has three degrees and runs a small business of his own, among other accomplishments.

In a written interview conducted with the help of generative AI, Nelson said, “Because it is difficult for me to type, AI makes it possible to put my information into articles and presentations much more effectively and quickly.”

He uses gen AI to proofread his work, help him submit highly complex grant proposals, and even wrote a book. Whereas Nelson used to have to provide short, often incomplete responses because of his disability, AI has enabled him to “share the full breadth of my ideas and vision,” he said.

“If a small business has a strong vision and strategy, it can now communicate just as strongly as a large corporation,” Nelson said. “It also opens up the means for people with disabilities to start more businesses, with more success, to earn their own money and have less need to rely entirely upon public assistance.”

Nelson now has an AI “clone” of himself created on Delphi. By uploading 422,000 documents into a database, people who work with him or receive consulting from him can chat with the clone about his opinions, ideas, and even his own experiences in life and business. Plus, Nelson will now have an audible voice that people can understand at a normal tempo, without the need of a voice-over or interpreter.

Todd Miller, president of Ohio-based Isaiah Industries, which manufactures specialty residential metal roofing and has about 50 team members, said in addition to using gen AI for content creation, website copywriting and podcast ideation and scriptwriting, his compant recently used the technology to generate a training video for contractors who sell its products. “We started out intending to just film the video but then decided that AI would save us some time, allowing us to get the training into the hands of our customers more quickly,” he said.

Earlier in 2024, Bennett Camarda and her husband, Bill, took over Limitless Fitness, a New Hampshire gym with more than 10 trainers and 150 active one-on-one clients. “We’re using AI to accelerate growth and scale our operations while keeping our clients at the center,” said Camarda.

Camarda said they have used ChatGPT Premium to write Excel formulas, which has helped them streamline contract operations from an hours-long process to one that takes minutes. “It’s even helped us revamp our brand strategy, refining our tone, voice, and messaging to better resonate with our evolving client base, from strength training for grandparents to optimizing performance for golfers,” Camarda said. That’s not to mention use cases like writing operations manuals or creating heatmaps to track their busiest times so they can add more training sessions where they’re most needed.

Despite the learning curve that comes with taking over a new business, Camarda said they’ve already nearly closed the -5% year-over-year revenue gap left from the previous owners, while bringing trainer and client engagement to an all-time high.

“Gen AI has freed up our time to invest in our community and focus on opening a second location, rather than being stuck in the day-to-day operational weeds,” she said.

A recent American Express survey found that small business owners adopting AI feel better positioned to grow and expand (50% of businesses that use AI plan to grow their workforce in 2025, compared to 36% of non-AI adopters).

“Small business owners are the chief everything officer,” Tremper said. “They’re hiring their early employees to help them build the business and wear just as many hats as they wear. Gen AI can not only take off hats from the business owner, but it does some of this for the employees as well and helps increase their productivity.”

While gen AI has no shortage of risks — like data security and hallucinations, for example — Tremper said small business owners are treading cautiously to avoid major pitfalls. “People are being very thoughtful about this technology and how to implement it in ways that make their business and workforce better,” he said.

The U.S. Treasury Department has delayed the deadline for millions of small businesses to Jan. 13, 2025, to file a new form, known as a Beneficial Ownership Information report.

The Treasury had initially required many businesses to file the report to the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Noncompliance carries potential fines that could exceed $10,000.

This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.

The rule applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.

Businesses and owners that didn’t comply would potentially face civil penalties of up to $591 a day, adjusted for inflation, according to FinCEN. They could also face up to $10,000 in criminal fines and up to two years in prison.

However, many small businesses are exempt. For example, those with over $5 million in gross sales and more than 20 full-time employees may not need to file a report.

The Treasury delayed the compliance deadline following a recent court ruling.

A federal court in Texas on Dec. 3 had issued a nationwide preliminary injunction that temporarily blocked FinCEN from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that injunction on Monday.

“Because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline,” according to the FinCEN website.

FinCEN didn’t return a request from CNBC for comment about the number of businesses that have filed a BOI report to date.

Some data, however, suggests few have done so.

The federal government had received about 9.5 million filings as of Dec. 1, according to statistics that FinCEN provided to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.

Hill has called for the repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.

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“Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an e-mail.

There’s a potential silver lining for businesses: It’s “unlikely” FinCEN would impose financial penalties “except in cases of bad faith or intentional violations,” Stipano said.

“In its public statements, FinCEN has made clear that its primary goal at this point is to educate the public about the requirement, as opposed to taking enforcement actions against noncompliant companies,” he said.

The BOI filing isn’t an annual requirement. Businesses only need to resubmit the form to update or correct information.

Many exempt businesses — such as large companies, banks, credit unions, tax-exempt entities and public utilities — already furnish similar data.

Businesses have different compliance deadlines depending on when they were formed.

For example, those created or registered before 2024 have until Jan. 13, 2025, to file their initial BOI reports, according to FinCEN. Those that do so on or after Jan. 1, 2025, have 30 days to file a report.

There will likely be additional court rulings that could impact reporting, Stipano said.

For one, litigation is ongoing in the 5th Circuit, which hasn’t formally ruled on the constitutionality of the Corporate Transparency Act.

“Judicial actions challenging the law have been brought in multiple jurisdictions, and these actions may eventually reach the Supreme Court,” he wrote. “As of now, it is unclear whether the incoming Trump administration will continue to support the Government’s position in these cases.”

Getting funding from investors for a startup is a major challenge for most founders, including sixth graders from Draper Park Middle School, located in the Draper suburb of Salt Lake City, Utah, who are learning how to turn an idea into a business and pitch potential investors.

“I’m really excited because I think our company has a good shot at winning it,” said sixth grader Laynie Alleman. She and her classmates participated in the “It’s My Business” competition, sponsored by Junior Achievement of Utah and Idaho in partnership with CNBC. The Shark Tank-inspired competition drew coverage from the NBC affiliate KSL-TV. 

This financial education project is part of CNBC’s Cities of Success series, which explores cities that have transformed into business hubs with an entrepreneurial spirit that has attracted capital, companies, and workers.

Alleman’s team had the business idea for “Just Right Clothing Company,” which makes t-shirts with heating and cooling technology for maximum comfort. They competed with two other teams: One, called Wish Wash Pet Brush, designed an all-in-one grooming tool, and the other, 2 Lit 2 Sip, a multi-functional heating and cooling cup. 

The students brainstormed and developed business ideas in their classroom for three months. The competition, the culmination of their semester-long course, took place at JA City, an experiential learning center in Orem, Utah. 

Middle schoolers at Draper Park are required to study entrepreneurship as part of their coursework. Yet, only some schools incorporate financial education for this age group nationwide.

Utah was the first state to require a personal finance course for high school graduation back in 2004. Two decades later, 26 states require high school students to take a standalone, semester-long personal finance course before they graduate, according to Next Gen Personal Finance. 

“As important as high school financial education is, a lot can happen before students even get there,” said Laura Levine, president and CEO of Jumpstart, a national non-profit coalition advocating to increase financial literacy. “By introducing financial education earlier, we may at least introduce some important financial concepts to those who don’t get it later.” 

“I’m all about dreaming big and achieving our full potential,” said Hallo founder and CEO Joon Beh, a Korean immigrant who created an on-demand language learning platform that has helped over three million students and also works with companies to automate their language assessments. 

Beh was one of three local startup founders who served as coaches for the top teams of 11- and 12-year-olds as they honed their presentations. Then, the teams pitched their ideas to the competition judges: Olympic gold medalist Ashley Caldwell and three of Utah’s top business leaders. The animal-loving judges ultimately picked Wish Wash Pet Brush as the winner.

Minky Couture founder Sandi Hendry, one of the competition judges, said she knows from experience the impact learning about entrepreneurship can have on young students. She was a sixth-grade teacher for 30 years before founding the luxury blanket company in 2009. 

“When I taught sixth grade, we always did a unit on doing a business, because I always had an extreme interest in forming a business and entrepreneurship,” she said.

Hendry said she was amazed at “how inventive, how creative, and how just fabulous these kids can just put together thoughts and ideas. I think this is a great program for them, and they have such bright futures.”

“Middle school is an important time to teach personal finance,” said Levine, who is also a member of the CNBC Global Financial Wellness Advisory Board. Even in states where there is a financial education graduation requirement, if that state, or parts of that state, have high dropout rates, we could be missing a lot of students.”

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This story is part of CNBC’s quarterly Cities of Success series, which explores cities that have transformed into business hubs with an entrepreneurial spirit that has attracted capital, companies, and employees.

Fewer than 15% of businesses in Salt Lake City, Utah, are owned by women, one of the lowest reported proportions in the United States, according to the latest data from the U.S Census Bureau. Still, there are efforts to empower women to start their own companies.

When Tessa Arneson opened a small Pilates studio in 2015, she noticed clients frequently asking for local service recommendations, prompting her to think about creating a network of related businesses.

“My dream was to jump away from corporate America and go and give people a little slice of happiness,” said Arneson, Maven co-founder and CEO.

Through the Pilates studio, Arneson met Rocky Donati, who had recently moved to Salt Lake City from San Francisco. Together, the two worked to create a community of entrepreneurs who could build and grow their businesses near one another in an area of the city called the “Maven District.” 

“I could see the vision,” said Donati, Maven’s co-founder and chief marketing officer.  She also saw something even bigger. “I could see the potential for bringing women together.” 

Maven has expanded from a single Pilates studio to several different businesses, including a co-working space, a boutique hotel, and more than 130 commercial tenants. Arneson and Donati said 85% of those businesses are owned by women. Back in 2013, the Pilates studio took in around $200,000 a year, the duo said. This year, all of the enterprises they own will generate about $4 million. 

Raising capital for underrepresented founders

Despite an increasing number of women-owned businesses, access to capital remains a significant barrier. Investing in underrepresented startup founders is what motivated Kimmy and Sergio Paluch to launch the venture fund Beta Boom in Salt Lake City. 

“There’s a lot of untapped potential still. So we’re getting there, but we’re not there yet,” said Kimmy Paluch, Beta Boom managing partner. “The potential I see is to fund more diverse businesses, to fund more women, to fund more people of color, and there are opportunities here.” 

The couple founded the firm in 2018, with a pilot fund of less than $1 million. Its second fund now has $15 million. Beta Boom invests in software companies in health, fintech and future of work, with an average investment of $300,000. It has already put $5 million into companies run by women. “What attracts investors is outcomes, revenue returns. Those are happening here in droves,” Paluch said.

Building a brand with mom influencers

Susan Petersen, founder and CEO of Freshly Picked, a baby and toddler lifestyle brand she started 15 years ago, knows what it means to break down barriers. 

“We have a high demand religion here,” Petersen said of the dominance of the Church of Jesus Christ of Latter Day Saints in Utah. Another hurdle is that online retail has been a male-dominated field. ”So any time I think you have those two things, you have preconceived notions that you have to fight against, you have walls you have to knock down, you have ceilings you have to break — and I’ve had to do a lot of that,” she said. 

In 2009, Petersen started sewing baby shoes for her newborn. She took a shot at selling them first on Etsy and gained marketing traction through numerous “mom influencers” on social media who live in the state. ”I would make sure and take care of them and form a relationship with them and they really helped me grow my business,” Petersen said. 

By 2014, when Petersen made a TV appearance on Shark Tank, the business was generating $500,000 a year in revenue. The broadcast fueled more sales and an expansion in her product line, into diaper bags and toys, available online and through boutiques and retailers nationwide, including Target. 

Petersen said revenue is now close to $20 million. She credits some of her success to women who helped her make her dream a reality. “I love how it feels like we’re all in it together,” she said. 

Scholars and political strategists have long observed a tendency among voters to seek change in leadership during periods of economic hardship, a phenomenon rooted in the belief that new leadership may offer solutions to pressing economic challenges. Our recent quarterly polls have highlighted small business owners’ concerns about inflation and other difficulties faced during the Biden administration.

Post-election, optimism is on the rise in the small business community. 

In the Q4 2024 CNBC|SurveyMonkey Small Business Survey, the small business confidence index has climbed to 62 out of 100, up 11 points from 51 in Q3 of 2024, and 16 points higher than Q4 of last year (at 46).

Republican business owners’ optimism is driving the surge in positive sentiment. Notably, small business owners who identify as Democrats report a decline in business sentiment, from 62 in the previous quarter to 50 in Q4. However, this decline is not enough to offset the massive jump in sentiment among Republican business owners — 28 points quarter over quarter. Independents recorded a small bump, from 51 points in Q3 to 57 points in Q4.

The online poll was conducted Nov. 11-Nov. 18 among a sample of over 2,700 small business owners.

Trump tariffs and partisan sentiment

While small business sentiment climbed, owners express concerns about the unknown when it comes to increased trade restrictions and the possibility of higher costs for imported goods and materials under a new upcoming presidency.

When it comes to tariffs, concern is split almost 50/50. Over half (54%) of small businesses overall are “not at all concerned” or “not too concerned”, while 46% are “very or somewhat concerned.”

When you slice the data based on political affiliation, 76% of Republican business owners show little to no concern about the proposed tariffs, compared to 22% of Democrats. Conversely, 78% of Democrat business owners are “very or somewhat concerned”, compared to only 24% of Republican business owners. 

Tariff troubles are further split along party lines. Four in ten (42%) small business owners expect President-elect Trump’s proposed tariffs to impact their business, compared with 33% who anticipate no impact. Republican business owners are more likely than Democrats to think that tariffs will not impact them (48% vs. 16%). Two in three (64%) Democrats think tariffs will affect their business, compared to just 31% of Republicans.

Interestingly, only one in four (23%) small business owners are taking preemptive action ahead of the proposed tariffs, with more than half not expecting to take any action (56%), and one in five unsure (20%). 

Agreement on an inflation peak

The findings of the survey reflect encouraging sentiment on inflation, and an outlook that is less partisan. Forty percent of small business owners feel that inflation has reached a peak, up from 33% the previous quarter — and including 45% of GOP respondents and 40% of Democrat respondents. While inflation continues to rank as the top concern for small business owners, only 28% cite inflation as their largest risk, down from 38% the previous quarter.

Confidence in the Federal Reserve’s ability to control inflation reached a new high in this quarter’s report, but the Fed remains an issue where partisan division is significant. Nearly half (45%) of small business owners are “very or somewhat confident” in the Fed’s ability to control inflation, up 11 percentage points from the previous quarter (34%). But 68% of Democratic Party respondents are included in that average, versus 31% of Republican respondents.

With the findings from the latest CNBC|SurveyMonkey study reflecting a surge in confidence and optimism, the question moves to whether this trend will endure long term. It remains to be seen how new economic policy actually impacts these entrepreneurs’ and their businesses as a new administration takes shape.

—By Eric Johnson, CEO, SurveyMonkey 

Harris campaign surrogates are planning a series of stops with small businesses in at least six battleground states this week, according to a preview of the announcement first obtained by CNBC on Tuesday.

Harris will not be attending these specific events herself. The campaign said “elected officials” and “community leaders” will go in her place, but did not specify who the surrogates will be.

The campaign tour, titled “Small Business for Harris-Walz,” is billed in part as an appeal to Black and Latino communities, key voter demographics that were essential to Democrats’ 2020 victory but have begun to slip in favor of Republican nominee Donald Trump this election cycle.

Trump has been working to capitalize on that momentum.

“If you’re Black or Hispanic, thank you very much, vote for Trump. You’ll be in good shape,” he said at a Georgia rally last Tuesday.

This week’s small business tour is the Harris campaign’s latest effort to quell Trump’s gains.

President Joe Biden ran a similar playbook when he was expected to be the Democratic presidential nominee before he dropped out of the race in July.

In December, for example, he touted the gains of Black-owned and Latino-owned small businesses under his administration as a way to highlight his efforts to close the racial wealth gap and to win back voters who felt nostalgic for the pre-pandemic economy that Trump oversaw.

Harris is adopting that argument for her own campaign, working to draw a similar contrast with her Republican opponent.

“Vice President Harris has proven that she will be a champion for small business,” Richard Garcia, the Harris campaign’s small business engagement director, wrote in a statement Tuesday. “Unlike Donald Trump who is only fighting for himself.”

Over the next week, the Harris campaign will extend that pitch specifically to small businesses in Arizona, Georgia, Michigan, Nevada, North Carolina, and Pennsylvania. The campaign plans to host a variety of organizing events, volunteer trainings and house parties.

So far, Harris has proposed giving small businesses a $50,000 tax deduction for their startup expenses, a tenfold expansion from the current $5,000 deduction. She has also floated a 28% tax on long-term capital gains, a lower rate than Biden’s 40% tax proposal in order to reward “investment in America’s innovators, founders and small businesses.”

Last week, the Federal Reserve slashed interest rates for the first time in over four years, signaling a potential uplift for stocks and Wall Street. But what does it mean for the backbone of America, our small businesses? 

A new CNBC|SurveyMonkey study fielded just before the Fed announced its first rate cut, which was anticipated — though the exact size of the cut was not — offers a glimpse into the minds of these entrepreneurs. The quarterly snapshot of Main Street businesses reveals a mixed bag of cautious optimism alongside lingering concerns about inflation and rising costs. With a divisive presidential election on the horizon, the uncertainty is palpable.

Four in ten (38%) agreed that inflation continues to be the biggest risk to their business. This is nearly three times higher than the next highest risks, consumer demand (13%) and interest rates (10%).

Nonetheless, the anticipated interest rate cuts also sparked a surge in confidence. A third (33%) of respondents believed that inflation had peaked, and overall optimism for inflation relief is the highest since the first quarter of this year. 

Three in five (62%) small business owners expected some degree of impact on the business from the recent interest rate cuts, with 22% expecting a major impact, and 41% a minor impact. These cuts are fueling action among small business owners: 40% intended to increase investments, 37% planned to expand their business, and 26% said they would stock up on inventory. Only one in five planned on increasing employee wages or benefits (20%) or hiring more employees (17%).

Kickstarted by the Fed’s recent decision, there is evident hope for stability as the economy seems poised to take a big step in a positive direction. For borrowers eager to take advantage of cheaper borrowing costs, this move could provide the boost they have been waiting for. 

Ahead of November, business leaders on both sides of the political spectrum are largely voting along party lines, with Democrats and Republicans sticking to their party choices. 

However, one interesting divide emerged in the survey. Republican small business owners preferred Joe Biden to Kamala Harris. Half of Republican small business owners (53%) favored Biden over Harris as the Democratic candidate, potentially showing a divide in how different candidates’ economic policies resonate with Main Street — or possibly an expectation that Biden would be easier for Trump to defeat in the election. 

Meanwhile, Democratic business owners overwhelmingly stand behind Harris. Nine in ten (90%) of these owners support Harris as the Democrat candidate, revealing the stark political polarization that exists in this community. 

Our study revealed a notable lack of enthusiasm for vice presidential candidates Tim Walz and JD Vance on both sides of the political aisle. 

Nearly four in ten (37%) small business owners thought that Vance would have a positive impact on their business, 13 points lower than Donald Trump (50%) but still higher than the Democratic vice presidential pick Walz (29%). Although both candidates saw majority support among small business owners from their respective parties (68% for Vance among Republican small business owners, and 67% for Walz among Democrat small business owners), presidential candidates generated stronger support within their respective parties (89% for Trump and 79% for Harris).

The CNBC|SurveyMonkey study affirms that businesses are cautiously optimistic as they continue to navigate the crosswinds of this uncertain landscape. While interest rate cuts are driving optimism and owners plan to reinvest their business in various ways, it will be imperative to continue to monitor and analyze this group as election season heats up.

— By Eric Johnson, CEO, SurveyMonkey