Small businesses are the backbone of a country’s economy. Unfortunately, in our society, jobs are often preferred over businesses, leading to job shortages in countries like Pakistan. However, starting a business doesn’t always require personal funds. In fact, you can start a business with Other People’s Money (OPM), just like successful businesses such as Alibaba, Amazon, Apple, and Microsoft.
Here’s how:
Be Honest
Honesty is the best strategic skill for success in business. Be truthful in your dealings with investors, stakeholders, and customers.
Work on a Business Plan
Develop a comprehensive business plan that outlines your business process, expenses, risks, and profits.
Design a Presentation to Pitch Your Plan
Create a professional and compelling presentation to pitch your business plan to potential investors.
Target 10-100 Investors within Your Community
Identify potential investors in your community and present your plan to them. Cast a wide net to increase your chances of finding interested parties.
Never Compromise on Hard Work
Starting a business requires hard work, dedication, and perseverance. Be prepared to put in the effort required to succeed.
Be an Active Learner and Don’t Give Up Due to Negative Feedback
Be open to learning from everything, including negative feedback. Don’t give up on your business dreams just because of setbacks.
Treat Stakeholders as Family
Treat your stakeholders with respect, fairness, and transparency. They are essential to the success of your business.
One Islamic way of getting potential investors for starting a business is through Mudarabah, a type of Islamic partnership. In a Mudarabah partnership, one partner provides the capital (known as the Rab-al-Maal), while the other partner provides the expertise and manages the investment (known as the Mudarib). The profit generated from the investment is shared between the two partners based on an agreed-upon ratio, while the loss is borne by the Rab-al-Maal.
The Mudarabah partnership is based on the principle of risk-sharing, where both parties share in the risks and rewards of the investment. This encourages the Mudarib to work diligently to ensure the success of the investment since they will receive a share of the profits.
The agreement between the Rab-al-Maal and the Mudarib specifies the investment period, the profit-sharing ratio, and any other terms and conditions of the partnership. The Rab-al-Maal can also set conditions on how the funds can be invested to ensure compliance with Islamic principles.
The Mudarib has the responsibility to manage the investment in a way that is both halal (permissible) and profitable. They are also responsible for ensuring transparency and keeping accurate records of all transactions and profits.
The profit-sharing ratio in a Mudarabah partnership is agreed upon between the Rab-al-Maal (capital provider) and the Mudarib (expertise provider) before the investment takes place. The agreed-upon ratio can vary depending on the nature and risk of the investment, the expertise of the Mudarib, and the amount of capital provided by the Rab-al-Maal.
It’s important to note that any changes to the profit-sharing ratio should be agreed upon by both parties and should be done in a transparent and fair manner. This ensures that the Mudarabah partnership remains true to its principle of mutual cooperation and risk-sharing between the two partners.
Starting a business without money is possible, and using the Islamic partnership concept of Mudarabah can be a viable option. It encourages entrepreneurship and risk-sharing, while promoting ethical business practices. With hard work, dedication, and a solid business plan a person without money can be a businessman or entrepreneur.
The author is CEO Spectrum Group. He is an entrepreneur and has a vision to make the businesses digitally empowered. He can be reached at https://www.linkedin.com/in/syed-tajamul-shah-bukhari-664b6411/.
Syed Tajamul Shah Bukhari, CEO, Spectrum Group