Optimism among small business owners is improving, driven by more favorable perceptions of their current financial situation and cash flow, according to the latest Wells Fargo/Gallup Small Business Index survey.

The optimism score came in at negative 11 during April, a five-point improvement from the previous survey conducted during January. Owner optimism has improved 10 points from the survey low of negative 21 during July 2009.

A score of zero indicates that small business owners, as a group, are neutral – neither optimistic nor pessimistic – about their companies' situations.

"As consumer and business spending appeared to pick up pace, this bolstered small business owners' optimism around their current situation," said Dr. Scott Anderson, Wells Fargo senior economist. "In our latest survey, we see more small business owners describing their cash flows and current financial situation as good and higher percentages seeing an increase in revenues over the last 12 months. However, business owners remain skeptical about the sustainability of this current upturn."

The Index is the sum of "present situation" and "future expectations" of small business owners for six key measures, including financial situation, cash flow, revenues, capital allocation spending, job hiring and credit availability.

The "present situation" improved seven points from negative 29 during January to negative 22. "Future expectations" declined slightly from 13 to 11.