What does profitable mean? Definition and examples
If a business is Profitable, it means that it generates a profit rather than a loss. In other words, the business achieves a financial gain. In a non-business context, the term means ‘useful’ or ‘beneficial.’ For example, if I say: “I’ve had a profitable day,” it means a worthwhile day, a beneficial or useful day.
This article focuses on the meaning of the term when we use it in a business context.
The Cambridge Dictionary has the following definition of the term:
“Resulting in or likely to result in a profit or an advantage.”
A profitable organization
When we use the term for organizations, we mean businesses that make a profit. A profit occurs when you generate more income than you spend. In other words, more money comes in than goes out. All business enterprises aim to generate as much profit as possible.
Businesses use many different tactics to make a profit. Before deciding whether to approve a new venture, senior management will try to determine whether it is commercially viable.
Viable, in this context, means profitable, but not just over the short-term. A viable business or project is one that we expect will make profits year after year.
According to SmallBusiness.Chron.com:
“A profitable organization is one that generates more money than it expends. Profitable organizations are businesses that use a variety of tactics to make a profit.”
Etymology of profitable
Etymology is the study of the origin of words and also how their meanings have evolved.
The term emerged in the English language in the thirteenth century with the meaning “yielding benefit, useful.” It came from the Old French words ‘Profitable, Porfitable.’
It was not until 1758 that it also acquired the specific sense of “money-making.”
Most profitable small businesses
In some businesses, it is inherently easier to make a profit than in others. Perhaps the expenses and overheads are exceptionally low, or consumers are willing to pay a high price for a product or service. SmallBizTrends.com listed the following as the most profitable small businesses in 2018:
- Tax Preparation and bookkeeping. Bookkeeping involves recording all of a companies day-to-day financial transactions.
- Catering services.
- Website design.
- Business consulting.
- Courier services.
- Mobile hairdressing.
- Cleaning services.
- Tutoring online.
- Logo design.
- Real estate brokering.
- Property maintenance.
- Warehouse storage.
- IT support.
- Personal training.
As far as small businesses are concerned, services are more profitable than, for example, manufacturing.
Service-oriented small businesses often have lower initial capital requirements and operational costs, making them more adaptable and potentially more profitable in changing market conditions.
Despite the potential for high profitability, small businesses must navigate challenges such as market competition and fluctuating consumer demands to sustain long-term financial success.
From the root word ‘profit’
The term ‘profitable’ comes from the root word ‘profit.’ There are many words in the English that are derived from the root word ‘profit.’ Let’s have a look at some of them:
The financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something. Here’s an example of the term in a context:
“The company’s profit this quarter exceeded expectations, reflecting a successful period of sales and cost management.”
To gain an advantage or benefit; to make a gain, especially a financial one. For instance:
“Investors hope to profit from the emerging technologies in the renewable energy sector.”
Yielding profit or financial gain; beneficial or advantageous. As in:
“The launch of the new product line turned out to be highly profitable for the business.”
The state or condition of yielding a financial profit or gain; the capacity to make a profit. For example:
“The company’s long-term profitability depends on its ability to adapt to market changes.”
Not profitable; not providing financial gain or benefit. As in:
“The new venture was unprofitable in its first year, leading to a reconsideration of business strategy.”
Without profit; unprofitable. For instance:
“Despite the high sales volume, the deal turned out to be profitless due to unexpected expenses.”
A person who takes advantage of a situation to make a profit, often in an unethical manner. As in: “During the crisis, some unscrupulous individuals acted as profiteers, hiking prices of essential goods.”
A global notion
The notion of the meaning of profitable is familiar to humans accross the world and way back in time. Here is a translation of ‘profitable’ in some of the most widely spoken languages apart from English:
Rentable (Spanish), Lucrativo (Portuguese), Rentabel (German), Rentable (French), Redditizio (Italian), Dochodowy (Polish), Прибыльный (Russian), مربح (Arabic), سودآور (Farsi), फायदेमंद (Hindi), منافع بخش (Urdu), লাভজনক (Bengali), 盈利 (Cantonese Chinese), 盈利的 (Mandarin Chinese), 利益がある (Japanese), 수익성 있는 (Korean), Menguntungkan (Indonesian), Có lợi (Vietnamese), Karlı (Turkish).
Compound phrases with ‘profitable’
There are many compound phrases containing the word ‘profitable’ in the English language. Let’s have a look at some popular ones:
A business project or activity that is expected to yield profit. Bill Gates’ venture in his garage as a young man paid off. He eventually created Microsoft, a giant software company.
An investment that generates financial gain or returns. This type of investment gives you a high ROI (return on investment).
A business or process that consistently produces profit. Amazon’s e-commerce platform is a good example of a profitable operation.
A market segment or area in which a business can make a substantial profit. Businesses can make considerable profits in the renewable energy market.
A business relationship or alliance that results in financial gain for all involved parties. The collaboration between Apple and Intel for microprocessors in Mac computers is a great example of a profitable partnership.
Video – What is Profitable?
This video presentation, from our YouTube partner channel – Marketing Business Network, explains what ‘Profitable’ means using simple and easy-to-understand language and examples.