In today’s digital age, many Muslims are exploring ways to earn a living online. The right business model is not only about financial success, but more importantly, it must align with our faith.
In this article, I’ll explain the ideal business model for Muslims, focusing on five key elements that are important for success and compliance with Islamic principles.
5 Key Elements for Your Online Business
1. Halal
First and foremost, the cornerstone of any business for Muslims is ensuring that all aspects of the business are halal.
If there’s anything involving alcohol, gambling, or interest (riba), for example, you must definitely steer away from it.
And this does not only encompass the products or services offered, but also the methods of earning revenue.
For example, a business model like YouTube automation relies on ads to generate revenue, so even if you post permissible content on your channel, you’ll have to think of other ways to make money.
The reason is that you would have no control over what ads get displayed in your videos, because this is determined by the browsing history and web activity of the viewer.
Yes, you’re not the one placing the ads yourself, but as a Muslim, do you want to be making money by showing adverts of half-naked women, for example?
Definitely not.
2. Ease of Getting Started
Starting a business can be daunting, but choosing a model that has a low barrier of entry makes the process much smoother.
The ideal business should have minimal startup costs as well as no prior experience requirement.
A good example is affiliate marketing, which does not require experience or a lot of initial investment to get up and running.
On the other hand, something like coaching, consulting, or selling online courses would only be an option for those who have a lot of experience in a certain field.
3. High Profit Margins
Of course, if you want to sustain and grow your business, it has to pay well.
This means you should go for products or services that have a significant markup, or those that cost little to produce but can be sold at a higher price.
Businesses like E-commerce and dropshipping typically don’t have high profit margins. To get a full-time income, you would need to make a very large number of sales every month, and this is definitely not easy.
But digital products like e-books, online courses, or software have high-profit margins because they involve one-time creation costs, but you can then sell them repeatedly with little additional expense.
4. Recurring Revenue
Ideally, you would want your business to generate recurring revenue — repeated earnings for something you only did once.
Subscription-based models and membership sites are very good examples of that.
The idea of recurring revenue is very exciting because it ties in closely with passive income, but it’s important to understand that there’s no such thing as free lunch. You cannot get to the point of passive income until you set up a proper business which is ready to generate it.
For example, in my article on affiliate marketing, I explained how writing only one blog post or product review with affiliate links can theoretically bring you earnings for years and years to come.
But I also said that it’s much easier said than done, and that’s because you must put in a lot of hard and consistent work before you can reach that stage.
5. Scalability
Another important element of the ideal business model is scalability — the potential to grow into a full-fledged company with employees.
What is nice about online businesses is that they’re particularly well-suited for scalability because they can reach a global audience.
A great example of a scalable business is freelancing. You can start out by building your portfolio and expertise on platforms like Upwork and Fiverr, and then grow into an agency with employees that you delegate tasks to.
A Business Model That Ticks All the Boxes
Considering the above elements, one business model that stands out is what I like to call digital intermediation.
People call it different names, but that’s the one I resonate the most with.
The concept behind digital intermediation is simple. You find a client who is looking for a service. You find a provider of this service who is looking for clients. You connect the two and earn a commission.
Here’s why it ticks all the boxes:
Halal ✅
Of course, you need to make sure there’s nothing haram with the service itself.
Ease of Getting Started ✅
The best thing about digital intermediation is that you’re not the one actually doing the service, so you don’t need to have any experience.
High Profit Margins ✅
This business model can be highly profitable if you pick the right service to intermediate.
Recurring Revenue ✅
As long as the service provider continues to deliver the service to the client, you will keep making money In Shaa Allah.
Scalability ✅
You can grow your business by hiring people to do the prospecting for you. In other words, you will have employees who will reach out to prospective clients and offer the service they’re looking for.
I only stumbled upon this business idea a month ago when I bought a $997 course. I still haven’t made any money yet, but I think it’s got immense potential In Shaa Allah.
Going forward, my plan is to share my experience with you here on Pious Wealth, and teach you more about digital intermediation and how this business really works.
If you think that would be a good idea, leave me a comment down below and let me know.
Wrapping Up
To choose the ideal business model as a Muslim entrepreneur, you need to consider both financial viability and adherence to Islamic principles.
Digital intermediation stands out as a particularly promising model, offering a balance of all the elements discussed in this article. While I am still in the early stages of my journey with this model, I believe it holds great potential for anyone looking to start an online business.
As I continue to explore and refine this business model, I look forward to sharing my experiences and insights with you here on Pious Wealth.
Your feedback is invaluable, so please leave a comment below if you found this article helpful or if you have any questions.
Rely on Allah and do your best,
Yusuf