According to the latest quarterly Wells Fargo/Gallup Small Business Index, small business owners report they are the most optimistic in seven years, with stronger revenues, improved cash flow and increased hiring contributing to the improvement.

In the latest quarterly small business survey, the overall Index score, which measures small business owner optimism, jumped to +71, significantly up from +58 in November 2014 and up from +45 in January 2014. While the score is still below pre-recession levels, it is the highest it has been since January 2008 when the Index score was +83.

Several factors contributed to the rise in optimism this quarter, including:

• Improved revenue: In the January survey, 49% of small business owners reported that their revenues increased a little or a lot over the past 12 months, up from 37% a year ago. This represents the highest reading on this measure since 2007, when 52% of small business owners reported increased revenues.
• Better cash flow: Business owners’ cash flow improved over the past 12 months, with 54% rating their company cash flow as very good or somewhat good, compared to 52% in the first quarter of 2014.

“The overall Index score speaks to the general improvements that many small businesses experienced in 2014,” said Lisa Stevens, Wells Fargo head of Small Business. “With the economy improving every day, many business owners are seeing stronger revenues and are feeling a renewed sense of confidence and expecting an even better year ahead.”

In addition to reporting an improved present situation, business owners are feeling confident about the year ahead. The positive outlook is reflected in the future expectations score, which increased to +43 in January, up from +37 in November 2014 and +29 a year ago.

To view the full Gallup news release, click here.