Macroeconomics, the circular flow of income and profits

In your example there would be no growth, because you are playing a zero sum game, which is a flawed assumption. You assume that households are purely composed of paid employees, which happen to hold a sterile amount of raw materials. In reality, the raw materials (milk, sugar, cocoa) keep growing from nature with time passing by, which is the first source of growth.

Countries are rarely isolated from the markets (examples today are North Korea and a few other countries). By participating in the international trade, nations (as a whole) get a chance to grow faster. Using your example, some countries would produce the raw materials and export them, while others transform it in chocolate, and export it back. Reading Ricardian trade theory on international comparative advantage is a good start, if you want to learn more.

The firm broke the circular flow of income in your example; profits went into a black hole.

Imagine that the firm instead distributes all profits to the owner, who spends all proceeds.

The firm gets $6000 in revenue, pays $5000 in wages, and pays $1000 in dividends. The wages and dividends are enough to provide the revenue.

I am ignoring the issue of the initial money holdings. There is a number of ways these transactions can be supported: credit, or the $1000 dividend was paid out revenue as it came in.

In order to respect the initial money holdings, and have sales of $5000, what happens is that the firm has excess inventory (with a sales value of $1000). That is, the workers could not afford to buy all of the output. The firm would be profitable, but with zero cash flow. Since the cash used to pay the workers returned to the firm, it would be able to then pay a dividend out of profits. That dividend could then be used by the owner to buy the remaining inventory.

It is not obvious how the firm can forecast its profits exactly in this fashion, but that would be covered up in an economic model by solving for all flows simultaneously. If all cash flows are settled simultaneously, we actually cannot see how the money flows work; we only see the net movement.

After making your "circular flow" a closed cycle, as @Brian_Romanchuk has done, you arrive to the so-called "monetary profits paradox". e.g. Bruun (2009) The paradox occurs when, taken into account all circular flows, we think on rising the level of production/income/expense, and then we find that existing amount of money is not enough. An immediate answer could appeal to a change in circulation speed of money, but this just obscures the question, doesn't answer it.

The true answer is also pointed to by @Brian_Romanchuk in a comment: credit. But it has to be previously recognized the role of credit in creating purchase power instead of rigid (false) schemes of banks as mere channels for mobilize existing money.