Before delivering his State of the Union address, President Biden's approval among Main Street Americans is sinking.

• Despite inflation increasing and negatively impacting small businesses, the latest CNBC|SurveyMonkey Small Business Confidence Index has not decreased any further.
• Since Biden took office, the lowest percentage of small business owners approve of him, which is 33%, and an equal percentage describe business conditions as "good."
• In a recent survey, Biden's approval rating among Democrats decreased the most, while support among independents increased slightly. However, other recent polls indicate declining support among independents and economic concerns impacting approval ratings.

To win back small business owners, President Joe Biden must deliver a successful State of the Union address on Tuesday night amid a war in Ukraine, stock market volatility, and inflationary pressures on the economy.

The recent CNBC|SurveyMonkey Small Business Survey for Q1 2022 shows that Biden's approval rating among small business owners remains below water.

The approval rating of Joe Biden among small business owners has decreased slightly, with 33% approving and 67% disapproving, which is lower than his Q4 2021 approval rating and the lowest since he took office.

Despite the small business community generally leaning conservative and Biden's low approval rating among Republicans (5%), his approval rating among small business owners who are Democrats decreased the most in Q1 (89% in Q4 to 83% now). However, his approval rating increased among independents (33% in Q4 to 42% now), which is different from recent public polling of Americans who don't affiliate with either major party.

Among white business owners, Biden's approval rating is the lowest (-42), while he receives high marks from Black small business owners (+22).

The percentage of small business owners who approve of Biden is the same as the percentage of owners who describe current business conditions as good.

Before the outbreak of war in Ukraine, a survey was conducted among over 2,000 small business owners across the U.S. The war will be a dominant theme in the speech, but with oil prices hitting a seven-year high on Tuesday and wheat prices surging to a level not seen since 2008 as a result of the conflict, Biden will also be pressed to address the inflationary pressures that were already sweeping through the small business sector and impacting business decisions and confidence on Main Street.

President Biden will use his speech to emphasize the importance of a strong economy, while acknowledging inflation, in addition to focusing on Russia and Ukraine.

Small business owners are facing economic challenges such as workforce shortages, inflation, and supply chain disruptions, with little relief in sight, according to surveys by CNBC and NFIB. Kevin Kuhlman, director of government relations at NFIB, stated that President Biden may acknowledge the challenges of inflation, but NFIB is concerned about policy proposals like paid family and medical leave mandates and federal minimum wage hikes, which could put additional pressure on small businesses. Additionally, NFIB is worried about union-friendly legislation.

On Monday, the White House emphasized its economic priorities, which included paid leave mandates, a higher minimum wage, and support for the Pro Act, which is backed by labor unions.

The international front has undergone significant changes, increasing the pressure on the President at home, according to Karen Kerrigan, president & CEO of the Small Business & Entrepreneurship Council. At this crucial moment, the President requires the trust and backing of the American people.

Instead of focusing on major tax or regulatory policies that increase costs and exacerbate inflation, the small business community needs a speech that addresses their top priorities, such as inflation, health care, and revitalizing the economy.

In an MSNBC interview, White House press secretary Jen Psaki stated that the American people will be informed about the strategies the president intends to implement to reduce their expenses and maintain a robust economy in the future.

According to Didier Trinh, the director of policy and political Impact for Main Street Alliance, members have reported supply chain squeezes and increased corporate concentration, which are further stifling supply chains and driving up prices.

Trinh pointed out that tax fairness and addressing the concerns of large corporations are areas where progress can be made to benefit small businesses.

Trinh stated that small businesses are not in an emergency situation as they were a year ago, but they are still far from full recovery.

Small business health-care costs related to the Affordable Care Act legislation and tax credits are another area where bipartisan cooperation can be achieved, according to experts.

A growing number of small business owners (47%) are raising their prices to cover rising supply costs, and more (32%) plan to do so if inflation continues to be a concern, according to a survey. Over 80% of small business owners anticipate inflation will still be an issue six months from now, with 55% saying it is "very likely." However, only 28% of small business owners are confident in the Federal Reserve's ability to control inflation.

Small business owners say inflation is the biggest risk to their business, with supply chain disruptions, Covid-19, and labor shortages following closely behind.

Inflation messaging

The White House released a fact sheet prior to President Biden's address, detailing his plan to emphasize a robust economy. The sheet highlighted that entrepreneurship and business investment have recovered, the economy has experienced its fastest job growth in history, and the fastest economic growth in nearly 40 years. Additionally, the fact sheet stated that there has been a shift from the traditional "trickle-down" approach to one that prioritizes workers, families, and small businesses.

But inflation remains the polling issue that dominates over broader economic gains.

No incumbent administration desires inflation to be a headline issue because they are blamed for it and lack control over it in the short term, according to Charles Franklin, director of the Marquette Law School Poll. On the other hand, inflation is a beneficial issue for the opposition party since no one likes it, they don't need a specific solution for it, and they can blame the incumbents.

According to Jeff Jones, Gallup senior editor, the data shows that economic sentiment varies based on specific issues, such as jobs and the stock market. However, since inflation has become a greater concern, overall views of the economy have become more negative. Jones stated, "The job market is doing great, but it seems like inflation is taking center stage and overshadowing everything else."

Franklin stated that Republicans can use inflation as a negative point against Biden, while Democrats tend to minimize it. However, this issue is a concern for both Biden and Democratic candidates, as independents are particularly worried about it.

While small business owners in a CNBC|SurveyMonkey poll were slightly more positive about Biden than in the previous quarter, a recent Quinnipiac poll released in mid-February found that inflation was the most pressing issue facing the country, with 27% of Americans citing it as their top concern. Independents were more closely aligned with Republicans on this issue, with 36% of Republicans citing inflation compared to 13% of Democrats. However, among independents, inflation was also the top issue, with 32% citing it as their top concern. Additionally, the Quinnipiac survey found that a majority of Americans expected Russia to start a war.

Nearly three-quarters of Americans, 72%, say increased prices on food and gas have caused them to change their spending habits, despite the majority describing their financial condition as good or excellent, according to a Quinnipiac poll.

According to a Quinnipiac survey conducted in February, more than half of independents disapprove of the way Biden is handling his job. Since October, his overall approval rating has remained consistent at 35%, which is below the 40% approval rating seen in previous months. Mary Snow, a polling analyst at Quinnipiac, stated that the approval rating has not improved since then and that independents are not contributing to the improvement.

Biden's economy approval rating in the Quinnipiac poll (33%) is the lowest since he began his presidency.

Kerrigan stated that it is his responsibility to reset his policies and political strategy by working with the opposition and to govern as a moderate, as he had promised to do when he ran for office.

Click here to learn more and sign up for CNBC's Small Business Playbook event.