In plain English
There is more than one profit. Gross profit is revenue minus what the goods cost you. Net profit is what is left after rent, fuel, labor, insurance, interest and everything else.
A business can have healthy gross profit and no net profit at all. That gap is usually overhead that grew faster than sales.
Example
Revenue $18,000, cost of goods $10,800 → gross profit $7,200. After $5,500 of operating costs, net profit is $1,700.
Why it matters
Profit, not revenue, is what funds inventory, survives slow months, and convinces a bank to lend.
COMMON MISTAKEPaying yourself out of gross profit and discovering at year end that the business never covered overhead.