Islam provides guidance in all aspects of life. Every piece of guidance is useful and morally valuable. The same is true in business as well. Islam provides us with a comprehensive model for managing a business in a fair, ethical, and honest manner. Which means following the guidelines and teachings of the Holy Prophet (PBUH) and other halal practices as mentioned in Sharia.
How do you do that? Well this is exactly what we will discuss in today's blog post. Here five tips to follow for starting an Islamic business that will make all trading smooth successful and in line with our faith and values.
6 Tips on How to Start a Business in Islam
Follow these five tips when starting a business in Islam:
1. Be Honest in Your Business Dealings
It is a principle of Islam that all dealings should be conducted honestly, particularly in trade and commerce. Since the stakes are higher in business, it is our responsibility to work openly to built strong trust between the vendor and buyer.
Islam has many ethical and moral codes, and observing them will not only bring you happiness in this world, but will also benefit you in the hereafter as well.
The Prophet Muhammad (PBUH) traded in goods himself. A number of the companions of the Holy Prophet engaged in both maritime and land trading at that time. His life and role as a merchant guide us all. He said:
“The honest and trustworthy merchant will be with the prophets, the truthful, and the martyrs.”
(Sunan al-Tirmidhi 1209)
2. Sell Halal Items Only
This one should be pretty self-explanatory. Want an Islamic business? Then sell halal things. But this goes beyond the obvious of alcohol and non-halal meat (pork). Additional aspects include no silk or gold for men’s clothing or the use of Riba (interest) within financial businesses. It in encouraged to have a sound understanding of what is allowed and not allowed to sell within Islam prior to starting out your Islamic business.
Holy Prophet (PBUH) said:
“When Allah forbids something, He also forbids its price.”
(Sunan Abi Dawood 3488)
It is also important to ensure that your business partners and suppliers are ethical. This will allow you to promote products that promote Islamic values. You can also make your products halal-certified to ensure your credibility.
Within Riwaya, we undergo business checks to ensure that everything on our marketplace is deemed to be halal by rules of general understanding. That way, you can buy and sell with confidence that we are supporting Islamic businesses in the right way.
3. Research Your Market
Research the market and see which product is in demand. Understand target audience needs so you can choose a profitable niche. Look for opportunities in markets like halal food, modest clothing, fashion, or Islamic finance. If you have a friend or someone from a close circle who is in this sort of business then ask for their help.
Take a look at our range of Halal food and modest clothing section to get inspired and find the perfect products to kickstart your business.
4. Utilize Islamic Financing Options
The key to any business is ensuring that your legal obligations are done correctly. Whether that is your tax obligations, wage obligations, or product payment obligations, we must ensure that we are honest in all of our transactions and don’t try to cheat the system or not pay our obligations at all.
There are many ways of trying to reduce your tax bill, which is perfectly fine and legal but remember not paying the correct amount of wages or tax at all does not only have ethical consequences from an Islamic perspective but is also illegal!
Additionally, many start-ups are looking at funding their businesses through investors to help with expansion and growth. When looking for funding, always go for Shariah-compliant funding which aligns with Islamic values meaning the money to be invested must be gathered from halal methods without interest or Riba. Checkout this article on Shariah complaint funding for more information.
It is important to note that mainstream investing isn’t always Shariah-compliant, so make sure that you search for funding options that are also Shariah-compliant.
5. Collaborate with other Islamic Businesses
One of the best things about starting an Islamic business is the amount of resources that is out there as well as people who are willing to support you and want to see you succeed.
Whether you are in tech, finance, launching a product or still haven’t decided, the chances are there is someone who would have tried to do something similar or can share some advice to help you succeed.
Go to networking events, message people on LinkedIn, Twitter, or Instagram, and try to build connections that can not only add value to your own businesses but also empower others and add value to those who are helping you, creating a win-win scenario for everyone involved.
6. Set a Target for Your Success
Make sure you do not limit yourself to opening a single successful Halal supermarket within your chosen community. Don't be afraid to think big. Consider increasing the variety and quantity of products in stock, and looking for ways to boost customer satisfaction and revenue.
It is also a good idea to discuss investment options with other shareholders and those within the Muslim community. You will therefore be able to reduce both your overhead and your retail price.
Lastly, avoid hoarding or monopoly of stocking a product because it is strictly forbidden in Islam. Holy Prophet (PBUH) said:
“Whoever monopolises is a sinner.”
(Sunan Abi Dawood 3440)
Selling on Riwaya
As a new Muslim business owner, if you’re looking to grow your brand and connect with a global audience, we warmly invite you to join Riwaya Online Marketplace. There are no registration or listing fees – just a simple sign-up process that opens the door to thousands of customers worldwide. Click the link to get started, add a few details about your business, and begin showcasing your products to a broader community today.
Conclusion
These are some valuable tips and suggestions you can follow when starting a business that aligns with Islamic values and principles.
With the right approach, it is possible to create a successful and halal business. Staying focused on your goals and always using ethical practices is important. With the right attitude and determination, you have the potential to make a successful and profitable business.
