Looking to Start a Business with A Halal Mortgage? You’ll Need a Business Plan

Maybe you’ve got a Halal mortgage and you’re an entrepreneur looking to start a business. If you are a practicing Muslim, you’ll want to make sure this Islamic investment is sharia compliant. Going through the proper channels to avoid riba is important.

It’s also a good idea to follow some traditional routes such as writing a business plan. This method not only highlights long-term goals, but is also essential to running a business on a daily basis.

Here are the steps you need to take to write one of these operational plans.

The Proposal

This type of description will help you to keep on track. For example, you’ll need to identify your target market. You will also need to define your specific business, the products or services you sell and your plans for future expansion.

This section should also include any unique selling points. This is where you outline how your goods and services will attract customers and make a difference in their lives.

The Market Analysis

Even though you’ve decided on a Halal mortgage, the lending institution you deal with will want to see this type of strategic plan. This market research shows lenders you can offer products and services to fit the needs of your target market.

The type of information you need to provide here includes a description of your target market and customer demographics. Lenders will also want to see your distribution and competition models. This section applies to the Islamic investment you are making. It outlines some of the critical features that will help your business to stay on course.

Financial Data

Even though you are getting a Halal mortgage, the lending institution will want to know certain details about your finances. For example, you’ll need to show what you intend to do with the cash they provide to help your business grow. Any potential investors will question when they can expect a return on their investment. Shareholders will ask about the share price.

Here are a few things you need to include in this part of your business plan:

• At least two years of financial projections and an analysis of both the market potential and market size.
• You need to include any assets like collateral you’ll use to secure a business loan. Generally, the more money you have, the more you will be able to attract from lending institutions.
• It’s important to present a cash flow forecast with this information. Basically, this is the amount of money needed to run your business and includes such things as equipment, technology and inventory.
• Most lending institutions will also want to look at your credit history before they decide to lend you money.

Starting a business is a good idea. Of course, it’s important to make sure you have a good foundation which includes Islamic investment tools. We can help with Islamic financing options. Get in touch with us today to learn more.