There are different interpretations, or levels, of profitability, for small business owners. Say your small business does $200,000 in sales for the year, but it’s total expenses for the year are $195,000. Yes, you’ve made a profit and technically your business is profitable. But in business, real, tangible profitability is when you as the business owner (and your co-owners, if you have them) can pay yourselves healthy salaries, while still having adequate cash in reserve to show a profit in your books. That being said, what profitability means to you will depend on your own business goals as a business owner and what success looks like to you.