There are also tax reasons to play with recorded salaries. Many small businesses are structured as "pass-through" entities, such as S corps and limited liability companies (as opposed to C corporations, as publicly traded firms are). That means the income "passes" straight to shareholders, who then pay taxes on it at their ordinary income rate, thus avoiding the corporate tax. (Losses flow through, too, allowing shareholders to offset income from other sources.)
For more on understanding the paths (and roadblocks) to greater profitability, check out The 20 Most Important Questions In Business, The 10 Questions You Should Never Stop Asking and The 10 Ingredients Of A Great Business Plan.