Business Lessons from Prophet Muhammad (S.A.W)

Islam has provided in the Quran and the Sunnah a guide for us even when it comes to our daily affairs such as in the matters of business. So let's look at some business lessons that the Prophet (S.A.W) has taught us. After all, who better to learn from?

1.  Be honest in your business transactions and realize that both parties have the right to know what they are agreeing to and that they have to right to refuse if they see fit. Make sure you are upfront about the details so that there is no misunderstanding and come to an agreement in advance on how the goods/services will be provided and how the payment will be made.

Hakim b. Hazim (Allah be pleased with him) reported Allah's Messenger(may peace be upon him) as saying: Both parties in a business transaction have the right to annul it so long as they have not separated; and if they speak the truth and make everything clear they will be blessed in their transaction; but if they tell a lie and conceal anything the blessing on their transaction will be blotted out. (Sahih Muslim Book 10, Number 3661)

2. If you have any debts, make sure that you do your best to repay your debtors. Plan ahead and try to manage your finances so that you can meet payments. If for some reason you are unable to make the payment when it falls due, talk to your debtors and figure out a payment plan that works.

Abu Rafi' reported that Allah's Messenger (may peace be upon him) took from a man as a loan a young camel (below six years). Then the camels of Sadaqa were brought to him. He ordered Abu Rafi' to return to that person the young camel (as a return of the loan). Abu Rafi' returned to him and said: I did not find among them but better camels above the age of six. He (the Holy Prophet) said: Give that to him for the best men are those who are best in paying off the debt. (Sahih Muslim Book 10 ,Number 3896)

3. When you are partners in a business or when you are joint owners of something, do not make big decisions without informing your partner. Instead, make these decisions together. It is always a good idea to come up with an agreement in advance to determine how decisions will be made if you ever do disagree. This can make it easier to solve any problems you may face and will help you both discuss potential scenarios in advance and think of a solution at a time when you are both able to think objectively.

Jabir b. 'Abdullah (Allah be pleased with them) reported Allah's Messenger (may peace be upon him) as saying: There is pre-emption in everything which is shared, be it land, or a dwelling or a garden. It is not proper to sell it until he informs his partner; he may go in for that, or he may abandon it; and it he (the partner intending to sell his share) does not do that, then his partner has the greatest right to it until he permits him. (Sahih Muslim Book 10, Number 3917 )

4. If you hire someone and they work for you, make sure you pay them their wages because that is their right. Not paying your employees/suppliers is morally wrong but also something that you can legally be held liable for. Making sure your employees and suppliers are happy also has a huge effect on the reputation and success of your business as the quality of your products and services will undoubtedly improve when the people working at your business are invested in what they do.

Narrated Abu Huraira: The Prophet (ﷺ) said, "Allah says, 'I will be against three persons on the Day of Resurrection: -1. One who makes a covenant in My Name, but he proves treacherous. -2. One who sells a free person (as a slave) and eats the price, -3. And one who employs a laborer and gets the full work done by him but does not pay him his wages.' " (Sahih al-Bukhari 2227 Book 34, Hadith 174)