Islam and Business Finance

Image courtesy of KROMKRATHOG at FreeDigitalPhotos.net Today, I will just be giving few tips on carrying out a market research. Every business must carry out a market research before starting their business. This will help the business figure out what products to make. The data that you want to obtain should then be determìned. Data can be gotten from the internet, questionnaires, focus groups, surveys, interviews and databases. The amount of money you will be willing to spend on the research should be determined, that will be one of the factors that influence your decision on the type of data you will be using. Secondary data are readily available since they have been previously collected and can be obtained easily from databases. Primary data are collected directly from the sources through interviews or questionnaires or focus groups. Both primary and secondary sources can be used to obtain data. If you are going to collect data via primary sources the next thing would be ...

Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net Hello readers, today, I decided to give you a list of industries you can invest in. These industries are profitable as such you can start a business or buy the shares (halal) of companies that exist in the industry. 1. Healthcare Industy This is one of the largest and growing industries in the world and it takes at least 10% of the GDP  (Gross Domestic Products) of most developed nations. The industry had a net profit margin of over 18% in USA (2015). 2.  Finance Industry This industry is also a very good one for investment. Everyone deals with money. The industry had a net profit margin of over 16% in USA (2015). However, your products should be halal 3. Transportation Industry Individuals always move about, thus it is a good industry to invest in. The industry had a net profit margin of over 8% in USA (2015). 4. Communication Industry This industry is also a good one, individu...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Anyone could learn a particular skill insha Allah (if Allah wills). It takes determination, commitment and the right mindset. Y ou have to break some emotional barriers that you might have such as I do not want to make an error in front of others, what if my work comes out bad. Everyone makes mistakes. This new skill you want to learn, if you have to know why you want to learn it, this will serve as a motivational factor.  Afterwards, figure out where you can learn this skill, do you need to attend classes or a workshop. If subjects being taught are optional, focus on the ones that are the most important to the skill you want to learn. Make sure you understand what you are being taught. Do ask questions if you do not understand and do not miss your classes or workshop. Practice regularly, carry out several tasks that will require you to use the skill you have acquired, eventually it could become a p...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Previously on this blog, I wrote an article "  How to prevent fraud in business: Part 1 " , so today I decided to write part 2. The risk of fraudulent activities exist in all companies. The use of CCTV camera works very well, use sophisticated cameras that can still reveal the identity of an individual in the dark. Yes, the CCTV camera is quite effective at preventing fraud. This will be applicable to companies that can afford such facilities If you receive a lot of money in cash on a regular basis, your staff must be instructed to take some amount to the bank (halal account) once it reaches a particular threshold. Only authorised personnels can take the money to the bank. When purchases need to be made by the company, it should be approved by 2 to 3 persons depending on the amount that needs to be spent. A sophisticated information system must be used once they can be afforded, they must be re-evaluated fr...

The way individuals communicate with others depend on their perception of the other person they are communicating with, their past correspondences with the other person and their emotional state. Personally, I believe that the way an individual communicates depend on how they perceive things. People interpret things differently, what might upset one person might not even bother another. Thus, you as an entrepreneur or a potential one will have to develop your reasoning skills insha Allah (if Allah wills). An individual might mean another thing some other individual might interpret it as another, thus, reasons should be given when necessary and appropriate. For example, a bricklayer might be told to set some blocks in a particular way, the bricklayer might not understand the reason behind it and might just decide to bypass that order. However,  if the bricklayer is told that it will make the building stronger then the bricklayer might be motivated to set the blocks the way ...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Hello readers, some have been rejected in business or at a job at one time or the other. Either you do not pass an interview or a client turns down your proposal or you are sacked. Rejection should not bring you down, I know some individuals might find it devastating, do not let it be that way. Once you get the rejection keep going do not stop there, just keep going.  At the end of the day it is just one person's or a group of people's opinion, as such a few NOs should not stop you, you have to keep pushing till you succeed in business. At times lack of skills could be a reason for a rejection but then these skills can be developed. Disobedience could also be a reason for rejection as such you could learn from that. Afterwards, the same goal can be pursued again after the required skill has been developed. If you try achieving a business goal using one method and it does not work, you have to try another metho...

As a good manager you do not have to know everything. No one knows everything except Allah (SWT). All you have to do is to manage the resources available the best possible way in order to achieve the best possible results. I was listening to someone talk, she went to the manager to get something signed. He actually did not know what to do so he asked for her advise. She said she felt so irritated, however she told him what to do. The manager was new.  A manager should understand a business but does not have to know everything. A good manager must be willing to learn from subordinates in other words he did a good thing by asking. Just because an individual is a subordinate does not mean they won't know something you do not know. A manager is part of a team, yes you are leading the team, your main goal is manage resources efficiently and effectively (which include human resources) in order to achieve great results. Someone once said to me that if people's expectation of ...

Image courtesy of hywards at FreeDigitalPhotos.net The shareholder's theory stipulates that agents of a company (managers) should only aim at increasing shareholder's wealth. However, the  stakeholder's theory came around and challenged the shareholder's theory. This theory states that the needs of all stakeholders must be taken into consideration. Stakeholders include the shareholders, managers,  employees, creditors, government and the community at large. There are times when the need of one stakeholder might conflict with the need of another stakeholder. Mendelow theory has dealt with such challenges. The theory suggests that stakeholders should be classified into four groups and this should be based on their power and interest in the company. Stakeholders with high interest and high power must be treated carefully, the stakeholders with little power but high interest in the company should be kept informed because they have the ability to influence more p...

Image courtesy of lekkyjustdoit at FreeDigitalPhotos.net You should  be prudent.That way you could thrive well financially as it will prevent you from spending more than you can afford to insha Allah. This should be applied in businesses as well, it will help owners to know the true position of the company, thus promoting growth as well as preventing debt problems. Stay away from interest, Allah hates interest. A prudent mind could avoid potential business problems. Thus, if you see a major red flag when you are about to enter a business. Do not enter the business deal, thinking you will deal with the problem when it occurs. You could end up with losses and probably even huge debts. Some individuals might say they saw the red flag but they ignored it, do not ignore it. In other words if their is a huge risk that the problem will occur and the impact will be high on the business, avoid the risk. Thus, reject the business deal.  Make sure your business is halal. ...

Image courtesy of franky242 at FreeDigitalPhotos.net Hello readers, what do you do before you sleep. Do you watch tv before sleeping you should not do this before sleeping. They could affect the quality of your sleep. As the research I carried out, makes me know an individual requires 6-8 hours of sleep everyday to be emotionally healthy. Allah(SWT) knows best. So the first action they carry out is not to work at least 1 hour before bed time. You should not associate your bed time with work because that way your mind might find it hard to relax when you want to sleep. The next action they carry out is to spend time with their family or spouse. They deepen their bond You should be thankful to Allah everytime. Your job or/and business should be halal.  Everything happens according to the will of Allah. Everything should be done deliberately for the sake of Allah. Part of  doing something deliberately for the sake of Allah is hoping for a reward from Him (i...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Both small and big companies have to put controls in place to prevent fraud. I have heard a story about a person living in one country and starting a business in another country. He leaves the business underneath the supervision of another, at the end of the day all what the business does is to make losses. Apparently, the person started a business in haulage, and all what the staff were reporting were losses. The person then decided to close down the business and the staff started begging. I told the person it is a small business you have to be there in person that is the one of the ways your business can become successful.  Even, when the owner is present at the business there are still some individuals that will try to defraud the business, talk-less of you being far away. When your business is small it is clear that you cannot put control of very high quality that will prevent fraud cause it is expensive. Once ...

Image courtesy of hywards at FreeDigitalPhotos.net - Individuals that are financially successful, think in a productive way. Thus, they always think before they act and they always take responsibility for their actions. - They do not procrastinate, they carry out actions when they are meant to. - They apply the pareto principle, the 80/20 rule, as such they figure out the 20% of their financial activities that makes the 80% difference and focus on it. - They go after their goals no matter how challenging it may appear. -They aim for excellence not perfection with a great sense of gratitude. You should be grateful to Allah everytime. Your business or job should be halal. Everything happens according to the will of Allah. Everything should be done deliberately for the sake of Allah. Part of doing something for the sake of Allah means hoping for a reward from Him (in this life and life after death) Keep checking my blog regularly, Cheers!

Image courtesy of 89studio at FreeDigitalPhotos.net As a business owner or manager you are going to be making decisions. The process of making decisions involves planning, implementing decisions and putting controls in place to enhance decisions. Before any business action can be carried out a plan has to be made. This plan will stipulate the objectives of the business and strategies that will be used to achieve the objectives. For a plan to be more realistic, it is always good to look at the performances of the past so as to be able to predict what can be achieved in future. Long term plans must be made and broken into short term plans. After objectives of a business have been stipulated, a business owner or manager will have to evaluate various possible medium (strategies) of achieving the objectives of the organisation.  Reliable information should be used, so that the best option is chosen.  After the strategy needed to achieve the business objective has been ch...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net It is okay to make mistakes as long as you learn from them. I overheard someone complaining that he couldn't deliver his work on time as a result of another colleague's negligence. Now he thinks the next person to handle the task will think he is slow. As a result of that, he had a bad day. You should not bother yourself over ridiculous things. For one, how do you know what the person will think, Allah knows best what is in the heart of man. If it bothers you that much walk up to the person and tell the person the reason behind the lateness. When you make a mistake, you should not feel bad and learn from it cause no one is perfect except Allah. However, when it comes to sinful acts you should feel remorse and ask Allah for forgiveness. You should adopt that style of thinking.  Make sure your business or job is halal. Everything happens according to the will of Allah. Everything should be done deliberately ...

Image courtesy of khunaspix at FreeDigitalPhotos.net I have not spent time with any Japanese but I have with some chinese people. I do love their mannerism  and not to mention I love chinese food (the food you eat should be halal). Hmm, I was carrying out my research today and I came across these words "Japanese Management System", then I thought to myself this will be interesting. I am familiar with strategic management, however, this is peculiar to Japan. Japan is the 3rd largest economy in the world, thus, I know you will be curious to know about their management system. Their style of management can be applied to a business. I found out that the reason why Japan excel is because of their hard-work, commitment of their citizens to the company they work for and an education system that delivers highly skilled and self motivated graduates. After that being said, the Japanese management system encourage businesses to make products that have no fault, using the ...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net This article could be useful if you buy and sell goods. You want to have an adequate amount of stocks available for your customers, you do not want to buy goods that customers won't buy until they go obsolete and then you have to discard them. You could also want to have the lowest storage cost possible, thus not storing excessive goods which could then lead to a high storage cost. A lot of factors are taken into consideration, other factors include minimizing your cost of re-ordering goods annually. You do not want to tie up your capital in stocks, thus you need funds to execute other business activities. Today, I am going to let you know when to re-order stocks and how much stocks you have to order for when you need new stocks. The re-order level is calculated by multiplying the maximum lead time by the maximum usage. The lead time is the average period it takes to order and receive your stocks while the usage...

Image courtesy of Salvatore Vuono at FreeDigitalPhotos.net Some people wake up early in the morning, while some others sleep till late. Guess what all successful entrepreneurs get up early in the morning. Some successful entrepreneurs get up by 6.00am, some are even up by 5.30am. You should get up before Fajr prayers to do Tahajjud prayers, and make supplications to Allah. Tahajjud prayer is not obligatory. Managing your time in the morning effectively and efficiently could become an habit over time once you start managing it. Now I sound like an expert on time management. I just carried out a research which I learnt from and I am delivering it. Do you know some Chief Executive Officers spend 30 minutes in morning running. It gets them fully prepared for the day. We have 24 hours in a day, 6-8 hours should be spent sleeping, 8 hours is spent working (not everyone, some people work part time or more hours) if you have a regular job (9am to 5pm). Thus, you have 8 free hours l...

Image courtesy of renjith krishnan at FreeDigitalPhotos.net * Always arrive to work on time, in other words be punctual. * Do not always make excuses to stay away from work. A good attendance record is required for you to keep your job. * Deliver results, the work you do should be considered as your product, thus find a way to differentiate your product, aim for excellence. * Make sure you treat your bosses with respect, however you can always make your suggestions known in a polite manner. * Your holiday should be booked in a strategic manner, thus, do not seek for holidays during busy periods. * Follow the culture of your department as long as it is halal. * Maintain a nice and modest look. *Your job should be halal.  These are tips, you could still lose a job but it could be for something better. Allah knows best. Everything should be deliberately done for the sake of Allah. Part of doing something deliberately for the sake of Allah is to h...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Everyone has procrastinated at a particular time in there life, but some people do it all the time. For example some people spend 30 minutes on their bed before they get up from their bed in the morning. Some individuals postpone actions to be carried out today, they keep telling themselves I will do it tomorrow, tomorrow comes and they say I will do it tomorrow and they end up not doing it n ot they do it when its too late thus leading to dissatisfaction.  All individuals that are financially successful hardly procrastinate, when you do not procrastinate it makes it easier for you to achieve your goal cause that way you do not have to rush things, you carry out actions at a very good pace. You set a long term goal, you break it into short term goals and then you write a plan to achieve these goals. The moment you execute your plan without procrastinating the higher your chance of achieving your goal, thus pr...

Image courtesy of suphakit73 at FreeDigitalPhotos.net This article can add value to government officials for the purpose of attracting foreign investments, however, I will be focusing on entrepreneurs. The Porter's Diamond model will be used to let you know what factors to consider when you want to open a branch of your business in another country. According to this model, there are four factors which are: -The Factor Conditions - Firm Strategy, Structure and Rilvary - Related and Supporting Industries - The Demand Conditions The Factor Conditions This relates to the nature of the country, as such you must consider the natural resources of the country, the availability of cheaper labour, the availability of lowly skilled staff as well as a well educated work force. That way you can be sure that a percentage of the population possess the skills required to execute the tasks needed for the achievement of your business goals. The weather condition, the secu...

Image courtesy of ahmet guler at FreeDigitalPhotos.net The way you lay your bed is the way you lie on it. Those words are popular. Today, I will be talking about your financial bed. So how do you lay your financial bed so you are able to lie on it comfortably? I will give you some tips to abide by - Always give out zakat when its due. It is obligatory. - Always give out regular charity. This is because Allah loves charity and He multiplies it in reward for you. Its called  sadaqa (its not obligatory but its really good for you) - Always save 30% of your income (halal account). - Always save first and spend after. - Always have more than one source of income. -  Make sure you build or buy a house  - Have a well diversified investment portfolio - Make sure you tackle a challenge immediately it occurs, the longer you take to react the longer it takes you to effectively overcome the challenge. - You should spend and invest your ...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net While money is a necessary tool that can help you achieve your goals and help you survive as a human. It should not define who you are, as such your self worth should not be embedded in money. How the way a rich man is treated is the same way a poor man should be treated. I say treat everyone with respect just because they are humans. We humans are all equal in front of Allah but we were created in ranks, as such we have leaders. Allah is the only God. There is absolutely no one like Him and He has no partner. Your self worth should be built on the love of God. The money is a blessing  from Allah that you might have worked hard for or might have  be given to you by a human (which is still from Allah) but it could also be taken away from you by Allah. What will you do then if that happens since all you are about is the money in your pocket. The source(s) of your income should be halal. I have not said do ...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net *First of all, make sure you do not deal with interest, it is bad for you. Allah hates interest. Some debtors are difficult, they will not make any attempt to talk to their creditors, some will do whatever they can to avoid creditors. When you have a debtor, for example when a payment is due and the debtor has not made payments.  * Call him/her politely to remind him/her about the payment cause it might have skipped their mind. *After few days if the payment is not made call the person during condusive hours, that is after 8am and before 9pm. Ask for your money clearly, politely and firmly.  *Do not abuse or threaten your debtor, just make sure you are firm.  * If no payment is made, ask your debtor  why they have not paid and be sympathetic with their reason(s). Showing that you understand their reason(s) will motivate them to pay up if you offer them a less stringent way of paying...

Image courtesy of Stuart Miles at FreeDigitalPhotos.net Everyone should diversify their investments this is because investing in only one type of asset and market could make your investments highly risky. Diversifying your investments could minimize your risk to the lowest, thus the losses made from one investment could be eliminated by the profit from another. There are various types of assets you can invest in; First of all, save in your halal bank account, shares (halal), properties (halal), gold (halal) and others (halal). The money you save in a halal bank account should cover you for one year of your living expenses. A halal bank account should not pay interest or give you profit if you are not assuming any type of risk of loss of money. However, an account whereby you have a risk of losing money or making profit is also halal but I prefer the former an account that pays nothing. The bank must use your money for halal investments.  " O you who have believed...