Your question demonstrates the importance that entrepreneurs play in an economy. In short, I don't know. That said, lets say we had a time machine and we could have the owner try one strategy, see the outcomes over five years, rewind, and then try to other.
Maybe using the extra profits to hire more results in more profits. Maybe paying the workers encourages better performance and results in higher profits. A rookie economist would see the higher profits from hiring more employees and say it was the right choice, but what if paying the workers more resulted in *even higher* profits? If you are asking for personal management advice, I would go for paying my employees more if the sales aren't expected to continue. If the sales are expected to continue, then I would split the difference and go for both.
Maybe using the extra profits to hire more results in more profits. Maybe paying the workers encourages better performance and results in higher profits. A rookie economist would see the higher profits from hiring more employees and say it was the right choice, but what if paying the workers more resulted in *even higher* profits? If you are asking for personal management advice, I would go for paying my employees more if the sales aren't expected to continue. If the sales are expected to continue, then I would split the difference and go for both.