What is profit? It's the sole reason your company exists. You want to have some money left over after you've paid off all of your expenses. Let's go through a very quickly. If you sell a product or service the money that comes in from that sale is income. Any costs that you have to buy a product, to resell, to buy a product that goes into a service that you have, to keep your doors open, the heat or the lights on: those are all expenses. Those are all things that you need to pay for. When you have income and you pay what you pay for all the expenses that you need to, if you have no money left over and you don't owe anything: then you've broken even. So let's say you charge one hundred dollars to clean someone's carpet. If it costs one hundred dollars to keep your lights on, say to fill up your truck with gas, then you've broken even. If you charge a hundred dollars to solve something and you are expenses exceeded your income: you are in the hole. You are in the red; you haven't got any money left. And you may still owe some other bills on top of that. However if you charge one hundred dollars, if you bring in on hundred dollars, and if your expenses are ninety five dollars for that period: you have a profit of five dollars. The object of running a business is to make enough money to cover your expenses and to generate some type of profit. What can you use the profit for? Well you shouldn't be using it to pay yourself because that should be one of your very first expenses and whatever expenses you have for whatever location (whether it's light, heat, rent, etc.). What many people do is reinvest that profit back into their business. Now whether that means upgrading their materials or putting it towards a better version of a service for you or your customers, that's probably what it should be. Some people just stick it in a bag. Some people invest it in other companies. But the sole reason that your company exists and that you're selling these products and services is to generate a profit. That is to have money left over from your income after you've paid your expenses. So let me ask you a question: do you have a profit for your business and if so what do you do with it?