Entrepreneurship is the process of starting a business or another organisation. It is the indivisible process of an entrepreneur. It is the process of identifying opportunities in the market place, arranging the resources required to pursue these opportunities and investing the resources to exploit the opportunities for long term gains. The entrepreneur develops a business model, acquires the human and other required resources, and is fully responsible for its success or failure. An Entrepreneur is an economic agent who plays a vital role in the economic development of a country.
Islam is a complete way of life. There is no separation between business and religion in Islam. Islam has its own entrepreneurship culture and guiding principles based on the Qur’ān and Hadith to guide business operations. Entrepreneurship is a part of Islamic economics and businesses. Entrepreneurship is the pursuit of opportunity beyond resources controlled. Prophet Muhammad (peace and blessings of Allah be to him) and his companions are examples of this. Islam always invites all Muslims to be innovative and active entrepreneurs.
Islam encourages men to remain always in search of bounties of Allah. It accords business and entrepreneurship a place of high esteem. Entrepreneurship is a factor that can change the economic problems of a country. It also engages lots of people as an employee or self-employed person. It is also a way to gain a lawful livelihood.
Islamic practices dictate that all transactions, including those of entrepreneurs, should strive to meet religious goals. In the context of Islam, a Muslim’s business activities must be focused foremost on pleasing Allah, which includes conducting a business consistent with the moral and ethical standards of Islamic practices, fulfilling one’s religious obligations, and contributing to the overall Islamic goal of benefitting the society as a whole. From this perspective, in a truly Islamic entrepreneurial framework, religion and economic activities are inseparable, and, as a result, the set of economic behaviours are guided not simply by secular, legal, and ethical guidelines, but by religious guidelines as well. Fulfilling religious obligations is a major aspect of entrepreneurship in Islam, thus, the success is measured not only by financial success but also by the ethical aspects which according to Islam may provide the entrepreneur with rewards in the hereafter.
Once, an unemployed companion asked the Prophet (peace and blessings of Allah be to him) for some charity. The Prophet enquired from him if he had any property. He replied that he had a blanket to cover his body and a cup to drink. The Prophet asked him to bring these things. When he brought them, the Prophet took them in his hand and auctioned them among the people. One of the present offered one dirham. The Prophet requested him to raise the bid; another man offered two dirhams and bought these things. The Prophet gave two dirhams to that man and advised him to purchase an axe with one dirham. When he bought the axe, the Prophet attached the handle to it with his own hands and, giving it over to that man, said, “Go to the jungle and cut wood and don’t see me before fifteen days.” After a fortnight, when he came back, the Prophet enquired how he was. He replied that he earned twelve dirhams during that period and he had purchased some cloth and grains. The Prophet remarked, “This is better than begging and disgracing yourself on the Day of Judgement.”
From this instance we have many lessons to learn. First, the Prophet (peace and blessings of Allah be to him) encouraged entrepreneurship, secondly, he used the available resources of the person to start the business and thirdly, he did not encourage the person to borrow money to start the business.
Prophet Muhammad (peace and blessings of Allah be to him) promoted partnership in many instances where one party would invest his time and energy and the other party would invest his resources. Once, Abu Hurairah reported, “Once the Ansar asked the Prophet to divide the date trees between the Muhajirin and themselves. The Prophet did not allow this but when the Ansar asked the Muhajirin to work in the gardens and share the produce with them, they readily accepted the offer” (and the Prophet was very pleased with this arrangement).
Islam gives certain principles to be adopted by people who become entrepreneurs. The following are the various principles:
i. Taqwa as a Framework: Successful Muslim entrepreneurs must have faith in Allah. Allah says in the Qur’ān, “O you who have believed, shall I guide you to a transaction that will save you from a painful punishment? [It is that] you believe in Allah and His Messenger and strive in the cause of Allah with your wealth and your lives. That is best for you, if you should know.” (Qur’ān 61:10-11) An entrepreneur must believe in Allah and strive in the search of wealth to improve him and do all of Allah and the teachings of the Prophet. The successful entrepreneur is when he has “taqwa” of Allah and greatness of “iman” through gaining lots of profit from the entrepreneurial activities.
ii. Halal Income: Added to the taqwa is the concept of “Halal” (which can be translated as accepted by the religion) which discourages Muslim entrepreneurs to sell alcohol and pork which are considered to be “Haram” (which can be translated as not accepted by the religion). Allah says in the Qur’ān, “And eat of what Allah has provided for you [which is] lawful and good. And fear Allah, in whom you are believers.” (Qur’ān 5:88) Islam has a key role to play in shaping the mode, and the level of entrepreneurial activity in a given society is gaining widespread acknowledgment and recognition. The link between religion and economic activity in the wider context was explored and demonstrated by the various studies.
iii. Kindness to Employees: When one becomes an entrepreneur, he tends to have many people working under him as well. Thus, Prophet Muhammad gave certain general guidelines for people, which would be more applicable and relevant for people who go on to become entrepreneurs. He said, “Allah is not merciful to him who is not merciful to people” (Bukhari and Muslim). The statement shows the importance of kindness with all types of people, either subordinates or superiors. The Prophet emphasised a lot on kindness. If a person deals with courtesy and kindness with his employees, he can get maximum output from them.
iv. Practising High Moral Values: The Qur’ān and the traditions of the Prophet Muhammad explicitly praise entrepreneurship and commend moral entrepreneurial activity such as the elimination of Interest. Allah says in the Qur’ān, “…But Allah has permitted trade and has forbidden interest.” (Qur’ān 2:275) Thus, Islam does not want people do indulge in any kind of business activity with the help of taking loan through interest.
v. Trustworthiness: The economic transaction of buying and selling for profit implies the existence of entrepreneur. Prophet Muhammad (peace and blessings of Allah be to him) said, “The truthful trustworthy merchant is with the Prophet as the true ones and the martyrs (on the Day of Resurrection).” (Tirmidhi) Thus, the Prophet motivated the people to be truthful in all their business transactions.
Furthermore, Prophet Muhammad and many of his close companions were trustworthy and successful entrepreneurs. He explicitly emphasised the importance of entrepreneurship and encouraged Muslims to actively participate in business and entrepreneurial activity.
vi. Payment Facility: The Prophet said, “Once a man died and was asked: “What did you use to say (or do) (in your life time)?” He replied, “I was a businessman and used to give time to the rich to repay his debt and (used to) deduct part of the debt of the poor.” So he was forgiven (his sins). Abu Masud said, “I heard the same (Hadith) from the Prophet.” (Bukhari) Thus, we learn from the hadith that during our business transaction we need to give more time for the people to pay back the money and also reduce the debt of the poor.
vii. Caring for the Environment: In Islam, environment and animals are sacred and valuable. Allah says in the Qur’ān, “But seek, through that which Allah has given you, the home of the Hereafter; and (yet), do not forget your share of the world. And do good as Allah has done good to you. And desire not corruption in the land. Indeed, Allah does not like corrupters.” (Qur’ān 28:77) Thus, Islam wants people not to cause any damage to the environment but wants people to protect and safeguard all aspects of the environment.
Prophet Muhammad said, “There is no Muslim who plants a plant or a tree, except that whatever is eaten from it is a charity for him. Whatever is stolen from that is a charity for him. Whatever is eaten from it by an animal is a charity for him. Whatever a bird eats is a charity for him, no one suffers a loss except that it will be a charity for him till the Day of Judgement.” (Muslim) The hadith clearly reflects the importance of protecting environment.
viii. Caring for Animals: Prophet Muhammad (peace and blessings of Allah be to him) educated people to be kind with animals. He came upon an emaciated camel and said, “Fear Allah regarding these dumb animals. Ride them when they are in good condition and feed them when they are in good condition.” (Abu Dawood) Thus, one needs to take good care of the animals which they use for their business activities.
ix. Social Responsibility: Islam wants people to be socially responsible, thus it had made it obligatory for people to give charity and zakat, in which every businessman is obligated to give zakat on their merchandise and stock. Allah says in the Qur’ān, “Never will you attain the good [reward] until you spend from that which you love. And whatever you spend – indeed, Allah is Knowing of it.” (Qur’ān 3:92) In the verse the Qur’ān makes it clear that if a person has to attain good reward then he will have to spend his money in the way of Allah.
“The Prophet (peace and blessings of Allah be to him) used to command us to pay sadaqah from (the goods) we had for sale.” (Abu Dawood and Al-Baihaqi) It includes real estate that are held for commercial purposes, buildings, automobiles, light or heavy duty machinery and other things that are kept for sale. As for the zakat on properties that are for rent and not for sale, it is due only on its revenue that is held for one year, not the value of the property, because the property itself is not for sale. Similarly, private and service vehicles are exempted if they are for personal use. If an owner of service vehicles or taxis, for instance, collects revenues that have reached the nisab, then he has kept for a whole year, regardless if he kept that revenue for getting married, purchasing property, paying off debts or for any other purposes.
Commercial stock and commodities include whatever is prepared for bartering and trading for profit, be it real estate, live-stock, food stuff, machinery or the like. If such commodities have reached the nisab and have been kept for one year, they should be evaluated and a 2.5% of its value must be given out.
Zakat is a right that belongs to Allah. It should be given only to those who deserve it. The payee should not produce any personal benefit or ward an evil off him through giving it. A Muslim should give to the beneficiaries that are mentioned in the Qur’ān willingly and intending to please Allah alone in order to receive the reward for giving it. Thus, giving charity and zakat makes an entrepreneur socially responsible as he financially contributes to the betterment of people and the society around him.
The concept of fard kifayah (collective obligation) in Islam is based on the ability of society to meet its minimum and basic needs from a specified activity or meet national challenges and obligations. An appropriate share of the population should undertake entrepreneurial activities by their own choice and according to their own initiative as Entrepreneurship not only helps a person to be self-independent but also helps for effective functioning of the economy of countries.
Having Islamic principles could cause someone to be closely related to Allah and the people. This relationship is based on the concept of Taqwa which needs entrepreneurs to totally be recumbent to Allah and also have a good relationship with other people. The above discussed principles will act as a foundation for individual relationships between the entrepreneurs with both Allah and other people. The relationships between the entrepreneur and the concept of Taqwa will give them the ability and capability in developing their characteristics based on the Islamic needs which are derived from the Qur’ān and the Sunnah. The principles given by Islam are an important asset to obtain high achievements in the field of entrepreneurship.