Optimism among business owners about the economic outlook is at its highest point in three years, according new research.

Principal Financial Group unveils this finding in “The Principal Financial Well-Being Index: Business Owners.” Conducted online by Harris Poll on behalf of Principal Financial, the study polled 600 U.S. business owners (those who own at least 5 percent of a U.S. company with 10 to 500 employees) and were actively involved in company management in July.

The research finds that 40 percent of American business owners feel optimistic about the economic outlook for 2015. This represents 14 percent rise from the 26 percent recorded in a Principal 2012 survey that explored the economic outlook for 2013.

The heightened optimism follows a strong year for America’s small to mid-sized businesses. Most business owners (53 percent) say their company’s financials have improved compared to last year.

Business owners are also more confident about the future health of their businesses. More than half (54 percent) believe their business financials will improve in 2015 and almost 9 in 10 business owners (88 percent) rate the financial health of their business as stable or growing. Additionally, 71 percent have surplus business capital, up from 62 percent in 2013.

On a personal level, most business owners report their household finances are “in good order.” Seventy-five percent of business owners see themselves as financially healthy, up from 71 percent in 2013.

The report adds that almost half (46 percent) of business owners are reinvesting profits back into their companies to help secure the future of their businesses. Additionally, some business owners are safeguarding their companies’ futures by enhancing their firms’ technology (37 percent) or taking steps to protect their businesses from unexpected losses (36 percent).

Hiring is on the rise. Forty-one percent of business owners added full-time staff in the past year, citing customer demand (37 percent), high volumes of business (36 percent) and confidence in future growth (31 percent) as the top reasons for growing their workforce. Likewise, 41 percent plan to add staff in the year ahead, up from 35 percent in 2013.

Retaining talented employees is a key focus for 43 percent of business owners. To keep employees loyal, happy, and healthy, 33 percent of them reported providing competitive benefit packages.

More business owners plan to add employee benefits in the next 12 months: 1 in 5 survey respondents (22 percent) pledge to offer additional employee benefits next year, up from only 16 percent in 2013.

Read the full report here.