Islam and Business Finance

Image courtesy of Stuart Miles at FreeDigitalPhotos There are individuals out there that do not think they can achieve financial success. Maybe they have not had the best of opportunities, its never too late to develop your skills. It is better late than never. Its best not to procrastinate. Define your goals, do not let anyone make you think you are proud because you believe you can go after some jobs that is a wrong way of thinking. It does not mean you are proud it means you believe you can do it if Allah wills. Do not be discouraged by little bumps or pot-holes just keep going. If you stop pursuing your goals you won't achieve it. Thus, if you won't give up on yourself, you can achieve your financial goals if Allah wills.  Make sure your job is halal. Everything happens according to the will of Allah (you have freewill and are responsible for your actions). Everything should be done deliberately for the sake of Allah. Part of doing something deliberately f...

Hello readers, so today I decided to write the 3rd part of this article. I will advise you to read part 1  and part 2  before reading this one and yes there is still going to be another part, the last part. There are 3 main qualities associated with fraud which include  1. The reason why the individual/group wants to commit the fraud. 2. The loop-holes in the system of the business that could make the individual/group to justify their fraudulent act. 3. The ability of the individual/group to justify their fraudulent act. When internal auditors do a good job it can be very useful at preventing, detecting and mitigating fraud. Prevention and detection are two different actions that can be used to deal with fraud. In order to prevent fraud, thus limit the exposure of the company to fraud, the owner/owners must set the right tone, thus they must deal with fraudulent activites in a strict manner  An effective and efficient internal control will prevent po...

Image courtesy of winnond  A 6 year old boy that was going to make breakfast for his Dad on his birthday. While he was trying to toast bread, he spoilt the toaster he had just purchased for $200. Now a school of thought will say the boy should be scolded since he spoilt the toaster, that he should not have touched the toaster. Another school of thought will say his intention was pure so he should not be scolded but thanked for his effort, however should be told in a very nice manner to seek adult supervision in future. Well, I agree with the latter. The boy should be thanked, that way you encourage him to keep doing good. He wanted to put a smile on his father's face. As such, he should be appreciated for it. P.S Parents do not tell your children they are asking you a stupid question, no question is stupid. If they do not know let them ask and that goes for adults too, if you do not know, ask. I overheard a father telling his daughter she just asked a stupid question and...

I watched a video on facebook, apparently I could not watch it to the end cause I was not glad with it. The woman was telling the police in her country to stop going after their boys for doing yahoo yahoo. To justify the arguments she said it prevents them from stealing from their community. Stealing is wrong whether it is from your community or other communities. So what? They do not have a job so the next thing is to deceive people into giving them money. That brain can be used for better things. It can be used to invent products, thus creating a business, thus creating employment opportunities and thus contributing to the development of your nation.  Secondly, all this people that go about scammimg other people you create a bad impression about your country and thus discourage potential investors that can contribute to development of your nation from investing in your country. That job issue she was talking about can also be addressed when more investors are attracted to...

Image courtesy of xedos4 at FreeDigitalPhotos.net Hello readers, Indonesia is a beautiful city to invest in, with an average GDP annual growth rate of 5.37% from 2000 to 2015. It is ranked 16th in the world on the list of countries by GDP (nominal). Here are the industries to invest in. Manufacturing Industry This industry is one of the most important in the industrial sector. The industrial sector contributes mostly to the annual GDP growth rate. The PMI increased from 46.9 in November, 2015 to 47.8 in December. Mining Industry This is another industry you should invest in. It also contributes immensely to the annual GDP growth rate of the economy. Leisure Industry The leisure industry is also a good one for investment. Thus, you should consider investing in the country. Due to the wealth rise in Indonesia, the purchasing power of customers have increased and they are willing to pay for leisure. Technological Industry This industry is booming and it is a...

Image courtesy of Sujin Jetkasettakorn at FreeDigitalPhotos.net I enjoy reading educative articles but I do not open articles that have negative headings. Be careful as to what information you allow into your system. Only articles that promote positivity should be read. It is not everything that you read on the internet that you should swallow in. Some individuals share ridiculous text on facebook. Some individuals put out negative information online, just because someone had typed that ridiculous information does not make it positive.  I once saw one text on facebook "when people try to stop my bad habit they are just mad because I am fun". What a ridiculous text. No you are not fun. Develop the growth mindset, negative information will not encourage the growth mindset. With this mindset, you will be able to achieve your financial goals insha Allah. Individuals that have developed the growth mindset believes you are either part of the problem or you are part of th...

Today, I decided to talk about how to minimize the exchange rate risk. I know some of you are into importing and exporting, thus you will be exposed to the risk. When foreign transactions are being carried out by an entity or an individual there is always a probability that the foreign currency that you might be receiving might fall in value when compared to the currency of the country where your business is domiciled. Thus, you end up receiving a lower amount than you expected.  A way this risk can be mitigated is to make the goods you are selling in the country you want to sell them (if your business is big). Thus, any business dealing that has to do with the country should be dealt with in that country. I have dealt with the economic risk associated with foreign currencies in this article.  Make sure your business is halal. Everything happens according to the will of Allah (although you have freewill so you are responsible for your actions). Everything should be ...

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...