How to Start Your Own Business

Are you tired of working for someone else...slaving away at a 9-5 job for pennies just to make your boss or company rich? Would you like a little extra money in your pocket to cover your bills until your next paycheck?

Maybe you'd be interested in becoming an entrepreneur, and learning how to start simple business ideas to grow your wealth, but you have little time or patience to learn...

Well if you keep doing what you've always done, you'll spend the next 40 years just getting by - and you most certainly will NEVER be wealthy working for someone else.

But I'm not telling you anything you don't already know.

If you're someone who's been searching for guides to starting your own business ideas, how many times have self-proclaimed gurus promised you HUGE money from the internet, or made ridiculous claims of $250,000 in a single month?

~Right!

If you're anything like I was, you've been duped by enough get-rich-quick schemes and so-called proven systems to make your head spin. And I bet you've parted with your hard-earned money more than once, only to learn that:

a) The business opportunity is far too complicated to learn and put to use, or
b) The business opportunity doesn't work at all

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Small Business Insurance Primer

It can be difficult to determine which kind of insurance you need for your small business. Different types of insurance have confusingly similar names; your state, town, or county may have its own insurance requirements; and many industries have coverage specific to them.

Insurance is one of the most neglected small business responsibilities. Not having the appropriate insurance for your small business is a mistake because a disaster can shut down your company permanently, or at least wreak havoc on your assets.

The Insurance Information Institute (III) in New York City estimates that about 40 percent of small business owners have no insurance at all, because many falsely believe they can't afford coverage. The truth is a small business can't afford not to have adequate insurance. Without insurance, you're unnecessarily putting your livelihood at risk. That's also why many landlords, suppliers, and other entities you work with will probably require you to have coverage.

If you're having difficulty determining which kind of insurance your business should have, you might want to check with the following agencies:

• The county or city clerk
• A local chapter of your industry association
• The state insurance office

Below are some of the different types of insurance small businesses use. Click on the type of insurance to get a more detailed description.

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About the Business Anti-Corruption Portal

The Business Anti-Corruption Portal is provided by Global Advice Network who is hosting and maintaining the portal for the ministries and agencies whose logos are featured above. The content in the portal is based on publicly available information. Global Advice Network will strive to ensure that all content available on this website is accurate. We depend on feedback from our users. If you identify inaccuracies or information which could be of value to the portal, please inform us.

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Sample Business Plans

Provided by Business Owner's Toolkit

Benefits: Its always easier to write if you have a clear picture of what the finished product should look like. The attached files contain the component elements of sample business plans for three fictitious companies. Taken together, they illustrate the type of information that is essential to the creation of a high quality business plan. These documents are not complete plans; they are not templates into which you can cut and paste information about your business. Instead, these documents demonstrate how the nature of a business and the target audience for the plan affect the content. After looking over one or more of these business plans, a business owner should have a handle on what information his or her business plan needs to contain to make it the best possible plan.

File Description: There are five documents available for download:

Two files are in rich text format (RTF) that is suitable for use with most word processing programs used in the Windows environment.

One file contains text formatted as tables in Microsoft Word 6.0. To use these forms, you need Microsoft Word version 6.0 or above.

Two files are Microsoft Excel spreadsheets suitable for use with Excel versions 4.0 and above.

Special Features:

• The service provider's business plan contains both text and spreadsheet components that illustrate the type of information that a new start-up business should include in a business plan.
• The manufacturer's business plan provides additional financial information to reflect its status as a going concern with a track record of financial results available.
• The retailer's business plan combines financial and textual components in order to demonstrate how a plan document might be simplified based on its intended audience.
• Taken together, the three plans provide insight into the differing concerns that must be addressed based upon the nature of the product or service that a business will provide.

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Organizing a business

The major factors affecting how a business is organized are usually:

• The size and scope of the business, and its anticipated management and ownership. Generally a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as partnerships or (more commonly) corporations. In addition a business which wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.
• The sector and country. Private profit making businesses are different from government owned bodies. In some countries, certain businesses are legally obliged to be organized certain ways.
• Limited liability. Corporations, limited liability partnerships, and other specific types of business organizations protect their owners from business failure by doing business under a separate legal entity with certain legal protections. In contrast, unincorporated businesses or persons working on their own are usually not so protected.
• Tax advantages. Different structures are treated differently in tax law, and may have advantages for this reason.
• Disclosure and compliance requirements. Different business structures may be required to make more or less information public (or reported to relevant authorities), and may be bound to comply with different rules and regulations.

Many businesses are operated through a separate entity such as a corporation, limited partnership or limited liability company. Most legal jurisdictions allow people to organize such an entity by filing certain charter documents with the relevant Secretary of State or equivalent and complying with certain other ongoing obligations. The relationships and legal rights of , limited partners, or members are governed partly by the charter documents and partly by the law of the jurisdiction where the entity is organized. Generally speaking, shareholders in a corporation, limited partners in a limited partnership, and members in a limited liability company are shielded from personal liability for the debts and obligations of the entity, which is legally treated as a separate "person." This means that unless there is misconduct, the owner's own possessions are strongly protected in law, if the business does not succeed.

Where two or more individuals own a business together but have failed to organize a more specialized form of vehicle, they will be treated as a general partnership. The terms of a partnership are partly governed by a partnership agreement if one is created, and partly by the law of the jurisdiction where the partnership is located. No paperwork or filing is necessary to create a partnership, and without an agreement, the relationships and legal rights of the partners will be entirely governed by the law of the jurisdiction where the partnership is located.

A single person who owns and runs a business is commonly known as a sole proprietor, whether he or she owns it directly or through a formally organized entity.

A few relevant factors to consider in deciding how to operate a business include:

1. General partners in a partnership (other than a limited liability partnership), plus anyone who personally owns and operates a business without creating a separate legal entity, are personally liable for the debts and obligations of the business.
2. Generally, corporations are required to pay tax just like "real" people. In some tax systems, this can give rise to so-called double taxation, because first the corporation pays tax on the profit, and then when the corporation distributes its profits to its owners, individuals have to include dividends in their income when they complete their personal tax returns, at which point a second layer of income tax is imposed.
3. In most countries, there are laws which treat small corporations differently than large ones. They may be exempt from certain legal filing requirements or labor laws, have simplified procedures in specialized areas, and have simplified, advantageous, or slightly different tax treatment.
4. In order to "go public" (sometimes called IPO) -- which basically means to allow a part of the business to be owned by a wider range of investors or the public in general -- you must organize a separate entity, which is usually required to comply with a tighter set of laws and procedures. Most public entities are corporations that have sold shares, but increasingly there are also public LLCs that sell units (sometimes also called shares), and other more exotic entities as well (for example, REITs in the USA, Unit Trusts in the UK). However, you cannot take a general partnership "public."

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The Highly Effective Marketing Plan (HEMP)

Description

A Highly Effective Marketing Plan (HEMP) is a process that will dramatically improve your chances of profitably selling more of your products and services. And HEMP will stop you wasting thousands, maybe millions of pounds, dollars, euros or yen on marketing initiatives that should never see the light of day.

HEMP is a straightforward, simple, 17 step plan which you can use to address your problems and opportunities whatever their size, whatever your business, whatever sector you operate in. And it’s tried, tested and proven.

Each step is detailed within the book with explanations as to why each step is necessary. Also, the benefits of completing the process sequentially are highlighted.

This is the book that will help you to:

• create a highly effective marketing plan that works – in just one hour!

• learn from the relevant case studies and examples and apply these to your business

• really understand your business and what it is that makes people buy from you

• identify the real obstacles to your plan – and how to overcome them

• gain tips for how to make sure your plan is successfully implemented

Contents

Step One - Desired Result

As Stephen Covey put it, "Begin with the end in mind." The principle of this step is: the greater the clarity of the outcome the more likely it will be accomplished.

Step Two – What’s it worth?

If you’re going to do something then value it. And identifying a monetary value helps create a universal currency, as others might view differently the worth you attach to your project. For example, "this initiative will create turnover of £5 million and produce £1 million profit in 12 months" has a clarity which will appeal to any board or bank.

Step Three – What are the consequences?

All new plans have consequences. There are potential upsides and downsides – what are they? And what will be the consequence of not implementing your plan? This chapter explores how important it is to identify every possible outcome before the plan commences: often people will be more motivated by fear of loss than by the pleasure of gain, e.g. "consider what will happen if we don’t pioneer this new initiative and our major competitor does instead."

Step Four – Targets

Who are we after? Who will be buying your product or service. And don’t just go for standard classifications; really go to town gathering information. Build a picture of these people. How old are they? How much do they weigh on average? Would they prefer to fly British Airways or Virgin? When did they last go to the cinema and what film did they see? The principle of this chapter is that you can’t know too much about your targets.

Step Five – What do they currently think and do?

Now you know who you’re after, (step four), what do these people currently think about your product and service? And as a consequence of what they think, what do they do? Do they know you for providing one product and think that’s all you do, (and as a result buy your other product from a competitor)? Have they never heard of your service or anything like it, (and therefore they currently do nothing)? Thinking precedes doing: know what your targets think.

Step Six – What do you want them to think and do?

Following on from the last chapter, we can now look at what we want people to think and having changed their mind will cause them to buy your product or service. The principle underpinning steps five and six is simple: change the thinking and you’ll change the doing patterns of your targets, (whereas so many companies try to get people to change their "doing" without thinking first.)

Step Seven – What’s the story?

What are you actually selling? This chapter prompts the exercise of succinctly writing down exactly what’s on offer. This exercise is amazing for many people who whilst believing they know what they do actually discover that either they don’t or they can’t adequately describe it.

Step Eight – The one big thing (10 second sell)

All too often peoples’ description of their service or product are boring and confusing filled with far too much irrelevant detail. This chapter distills down to the ONE big thing on offer. This chapter is what Pearson calls "The 10 second sell", and you know how effective that is.

Step Nine – What’s the benefit?

This step looks at the one big thing and asks the question: so what? What do you do for the target customer? Does this benefit them significantly? Is it compelling and how does it compare to the competition?

Step Ten – Know yourself

Is your current personality appropriate for the product or service you’re offering? There’s no point your being seen as British Airways if your product is designed for Virgin customers. There’s a built in disadvantage, which is unnecessary, for a traditional old-fashioned company offering a service which will primarily appeal to youth. This step asks the question: do you need to review the personality of your company for this new product or service to work? There are lots of examples of how companies have successfully changed to inspire readers; for example Gieves & Hawkes, Burberry, FCUK in the fashion industry; Tesco in food retailing and Swatch watches.

Step Eleven – How will you talk to your targets?

We explore the different communication methods and mediums which can be used singularly or more often than not are combined for maximum impact. The real life examples of marketing excellence, which are highlighted throughout the book, deliberately draw on a variety of mediums including: poster, TV, radio, press, direct mail, PR, ambient, viral email, etc. Some honest insider truths about the effectiveness or otherwise of certain media will be revealed.

Step Twelve – How much?

What’s your budget? Compare this with the numbers written down in step two: is it realistic? Compare this with the ideas you’ve got from step eleven: is it realistic? If not then some rethinking is required.

Step Thirteen – Other resources

It’s not just money. Your plan will need other resources, people, equipment and time. Identify all of these at the beginning, not on the hoof, and get commitment from others who are vital for helping achieve the desired result. How much of your time will the plan take up? What will you stop doing or give up to create the time for this plan?

Step Fourteen – Measure it

According to Tom Peters, "if you can’t measure it you can’t manage it" – too right. Therefore identify at the outset the measurements which will tell you that you’re on the right track. Sometimes these can be unusual ones which might be more revealing than numbers alone, for example ‘Your Mother Should Know’ is a process some companies can use: every employee asks their mother if they’ve heard of the xyz product, or seen the latest advertisement and measures the response. The same apparently random yet amazingly revealing technique works when consulting employees children and their friends about a service geared to that age group.

Step Fifteen – What next?

This is where we get readers to make a written commitment to take the next actions. What are the ten most important things that are needed to be done first? These can be large or small.

Step sixteen – What’s your name?

The best plans often have a name. This ensures that everyone knows what the meeting is about when they see the ‘ABC Plan’ on the agenda. Choose a name which really motivates.

At the end of the book I will include tips for successful implementation of HEMP based on hundreds of real case studies.

General notes on content

Throughout the book are real case studies and examples including great photographs, pictures, graphs and evidence of people making lots of money and having huge success thanks to HEMP.

Features

• HEMP is proven – over 300 companies have used HEMP and found it to be highly effective, indeed several people have gone on record to state that as a consequence of HEMP they’ve made £ millions.
• HEMP is very practical. It’s a step by step process without any marketing-speak or jargon, indeed it includes a 10 second sell (and we know how effective that is).
• HEMP can be used by small start up companies and multinationals alike.
• HEMP is for marketing people, and non-marketing people; chief executives and new people looking to get on; everyone in business can use HEMP.
• Perfect core business seller – this is to marketing what Sold! is to selling.

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Starting from the education business

Many complained that to open a business opportunity is not there. This is a classic complaint that can not be with us again. Indeed, to start a business we can do with a variety of ways, one with the education that we have. Jerry Yang and David Filo, the founders of Yahoo start a business with education. They are students from Stanford University. Yahoo started from the back parking lots is now growing rapidly. Jerry Yang and David Filo started the business from small and simple. Jerry Yang describes the discovery that Yahoo is "an accident" when he and Filo tesisnya complete. Filo and that this launch Yahoo when they sit in the universities, before they complete studies. They start doing business with the listing several web sites that they like and write some software that allows a website to get other web sites that will be placed on a web portal called. At the time established in 1994, named Terry's Guide To The World Wide Web. When they know that their sites visited by people from 90 countries, spontaneously say "Yahoo" and finally the words that are used to name their company. In 1999, Yahoo reach star status. Net income in quadruplicate fourth quarter of 57.6 million dollars, while revenue jump from 91 million dollars into 201 million dollars. Now, Yahoo is the best portal in 2002.

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Banks in the economy

Size of global banking industry
Worldwide assets of the largest 1,000 banks grew 16.3% in 2006/2007 to reach a record $74.2 trillion. This follows a 5.4% increase in the previous year. EU banks held the largest share, 53%, up from 43% a decade earlier. The growth in Europe’s share was mostly at the expense of banks whose share more than halved during this period from 21% to 10%. The share of US banks remained relatively stable at around 14%. Most of the remainder was from other Asian and European countries. .[7]
The US had by far the most banks (7,540 at end-2005) and branches (75,000) in the world. The large number of banks in the US is an indicator of its geography and regulatory structure, resulting in a large number of small to medium sized institutions in its banking system. Japan had 129 banks and 12,000 branches. In 2004, Germany, France, and Italy had more than 30,000 branches each—more than double the 15,000 branches in the UK.[8]

Bank crisis
Banks are susceptible to many forms of risk which have triggered occasional systemic crises. Risks include liquidity risk (the risk that many depositors will request withdrawals beyond available funds), credit risk (the risk that those who owe money to the bank will not repay), and interest rate risk (the risk that the bank will become unprofitable if rising interest rates force it to pay relatively more on its deposits than it receives on its loans), among others.
Banking crises have developed many times throughout history when one or more risks materialize for a banking sector as a whole. Prominent examples include the U.S. Savings and Loan crisis in 1980s and early 1990s [9] the Japanese banking crisis during the 1990s, the bank run that occurred during the Great Depression, and the recent liquidation by the central Bank of Nigeria, where about 25 banks were liquidated.[citation needed]

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Insurers jump on bailout speculation

NEW YORK (CNNMoney.com) -- While the rest of Wall Street got clobbered again Friday, a handful of insurance stocks rallied sharply on speculation that the Treasury Department may soon invest in companies in the battered industry.
After being down most of the morning, shares of MetLife (MET, Fortune 500) ended the day up 7%. Hartford Financial Services Group (HIG, Fortune 500) jumped 16% at the end of Friday's session after being down in the morning session. Prudential (PRU, Fortune 500) closed more than 6% higher after starting the day lower.
And Aflac (AFL, Fortune 500), the health and life insurance company that reported Thursday that its earnings had tumbled 76% in the fiscal third quarter, gained 7% by the end of the trading session Friday.
Shares of these insurance companies surged after the Washington Post and the Wall Street Journal both reported that the Treasury Department was considering extending funds from the $700 billion bank bailout, or Troubled Asset Relief Program (TARP), to the battered insurance group.
Steven D. Schwartz, a life insurance analyst at Raymond James, said that the rally in insurance stocks "had a lot to do with" the published reports.
Another analyst echoed that sentiment. "It was all about some of the headlines that started to come across," said John Nadel, senior insurance analyst at Sterne, Agee & Leach.
"It looks like there is now at least the potential that there could be [another] source of capital for the insurance companies," said Nadel.
However, both analysts expressed reservations as to whether the insurance industry actually needs a lifeline from the government, as the banking industry did.
"The balance sheet of the life insurance industry is significantly better than either the balance sheets of the investment or commercial banks," said Schwartz.
Stock prices of insurance stocks have declined "out of fear that the life insurance industry is next, that the life insurance industry is primed to have a number of failures" said Schwartz. "That is not going to happen."
Nadel said that the status of life insurance companies depends on how the credit crisis is resolved. "Whether insurance companies and life insurance companies in particular need to be part of the program is going to be determined in large part by how corporate credit behaves," said Nadel.
Insurance companies depend on longer termed investment securities for their funding than banks do, explained Nadel.
"So long as the insurance companies are positioned to be able to hold through a tumultuous market, so long as these securities recover in value, then they should be fine," he said.
The insurance firms have all been hit hard as the value of many of their investments in the financial industry and other stocks have evaporated during the credit crisis.
Aflac suffered from investments in Lehman Brothers and Washington Mutual as well as struggling automaker Ford and warned that its fourth quarter results would be hurt due to exposure to Icelandic banks.
Other insurers have also had exposure to mortgage financing giants Fannie Mae and Freddie Mac as well as insurer AIG.
A lot of uncertainty in the market remains, however. MetLife, Hartford and Prudential, which have already warned that third quarter results will be worse than expected, are all set to report their quarterly reports next Wednesday afternoon.
By Catherine Clifford

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Don't fear a hike in insurance premiums

NEW YORK (CNNMoney.com) -- With the government effectively taking over American International Group, the nation's largest insurer, there's reason to be concerned about the health of the insurance industry.
Tuesday's $85 billion rescue of AIG (AIG, Fortune 500) isn't the only problem facing the insurance industry. AIG and other insurers also have to deal with billions of dollars in damage caused by Hurricanes Gustav and Ike in the past few weeks.
But experts are quick to point out that the financial woes facing AIG shouldn't have any impact on the company's policyholders. In addition, while the hurricanes may lead some insurers to raise their premiums, or the fee you pay for insurance coverage, most industry watchers think the increases will be modest.
Insurance policies are safe
First, here's what you need to know if you're an AIG customer.
On Tuesday, AIG issued a statement to reassure policyholders that they remain fully covered by AIG subsidiaries.
"These companies are well capitalized and meet or exceed local regulatory capital requirements. The companies continue to operate in the normal course to meet obligations to policyholders," AIG said in a statement.
Insurance policies are fully backed by state guaranty associations up to a certain amount (determined on a state-by-state basis), which covers life insurance as well as property and casualty insurance.
That means that consumers should not worry that their auto and homeowner policies are in jeopardy. (For more about how AIG's bailout may effect you, click here.)
Premiums unlikely to rise by much
Experts did say, however that AIG and other insurers may have to raise their premiums in the future. But that's probably more of a byproduct of this year's hurricane season and not AIG's collapse.
"There could very well be increases because of catastrophic losses from hurricanes and things of that kind," said Joseph Belth, professor emeritus of insurance at Indiana University and editor of The Insurance Forum, an insurance industry newsletter.
Generally, increases are felt in the areas where the hurricane exposure is greatest, Belth said. But even policyholders in areas not hit by hurricanes could be asked to pay a higher premium when their policy is up for renewal, which is typically once a year.
That's because "the insurance company may try to spread it out somewhat," Belth said.
While it's still too early to estimate the total amount of damage caused by this year's hurricane season, it's unlikely that it will be enough to cause a dramatic rise in insurance premiums across the board.
"The property and casualty insurance industry has gone through record years of profits," said Robert Hunter, Director of Insurance for the Consumer Federation of America, "so the leverage ratios are the safest ever."
In addition, rates are calculated over an extended period of time, explained Ed Domansky, spokesman for the Florida Office of Insurance Regulation. "One particular season is not going to impact policyholders' premiums," he said.
Finally, insurance companies cannot just raise rates at will, according to Michael Barry, a vice president at the Insurance Information Institute.
"Insurers require the approval of their regulator in order to raise rates," he explained, adding that getting such approval is a long and complicated process overseen by state insurance commissioners.
Even though experts agree that the industry's woes are unlikely to affect the average consumer, those that do discover a rate increase in their next renewal notice should take that as an opportunity to shop around for a new insurer.
"Other companies may not be raising rates as much as yours," Hunter said.
By Jessica Dickler

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Conditions for the Utilisation of the Property Given on Lease

The utilisation of the property given on lease carries four conditions: (i) That it should be halal. Hence, leasing out a shop for the sale or storage of Alcoholic drinks, or providing transportation by leasing for it, is void. (ii) That doing the act or giving that service free of charge should not be obligatory in the eyes of Shariah. Therefore, as a precaution, it is not permissible to receive wages for teaching the rules of halal and haraam, or for the last ritual services to the dead, like washing it, shrouding etc. And as a precaution, money should not be paid in lieu of any services which is deemed futile . (iii) If the thing which is being leased out can be put to several uses, then the use permissible to the lessee should be specified. For example, if an animal, which can be used for riding or for carrying a load is given on hire, it should be specified at the time of concluding the lease contract, whether the lessee may use it for riding or for carrying a load, or may use it for all other purposes. (iv) The nature and extent of utilisation should be specified. In the case of hiring a house or a shop, it can be done by fixing the period, and in the case of labour, like that of a tailor, it can be specified that he will sew and stitch a particular dress in a particular fashion. If the time of commencement of a lease is not fixed, it will be reckoned to have commenced after the recitation of the formula of lease. If, for example, a house is leased out for one year, and it is stipulated that the period of lease will commence one month after the recitation of the formula, the lease contract is in order, even if the house had been leased out to another person at the time of reciting the formula. If the period of lease is not specified, and the lessor says to the lessee: "At any time you stay in the house you will have to pay rent at the rate of $10 per month", the lease contract is not in order. If the owner of a house says to the lessee: "I have leased out this house to you for £10 per month" or says: "I hereby lease out this house to you for one month on a rent of $10, and as long as you stay in it thereafter the rent will be $10 per month", if the time of the commencement of the period of lease was specified or it was known the lease for the first month will be proper. If travellers and pilgrims stay in a house not knowing how long they will stay there, and if they settle with the landlord that they will, for example, pay $1 per night as rent, and the landlord also agrees to it, there is no harm in using that house. However, as the period of lease has not been specified, the lease will not be proper except for the first night, and after the first night the landlord can eject them as and when he so wishes

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Laws of Partnership in Islam

If two persons make an agreement that they would trade with the goods jointly owned by them, and would divide the profit between themselves, and if they pronounce a formula declaring partnership, in Arabic or in any other language, or express their intention of becoming each other's partner by conduct, the partnership will be valid. If some persons enter into a partnership to share the wages from their labour, like, if a few barbers or labourers agree mutually that they would divide between themselves whatever wages they earn, that partnership is not in order. But if they enter into a mutual compromise that, say, half of what one earns will be given to the other, for a fixed period, in exchange of half of what the other earns, this transaction will be valid, and thus each will be a partner in the wages of the other. If two persons enter into a partnership, on the terms that each of them would purchase the commodity on his own responsibility, and each would be responsible for the payment of its price, but would share the profit which they earn from that commodity, that partnership is not valid. However, if each of them makes the other his agent, authorising that whatever one purchases on credit, the other will be a partner in it, which means that he and his partner are responsible for the debt, then they will be considered partners in that commodity. The persons who become partners under the rules of partnership, must be adult and sane, and should have intention and free volition for becoming partners. They should also be able to exercise discretion over their properties. Hence, if a feeble-minded person who spends his wealth impudently, enters into partnership, it is not in order, because such a person has no right of disposal over his property. If a condition is laid down in an agreement of partnership, that the partner who manages, or does more work than the other partner, or does more important work than the other, will get larger share of the profit, it is necessary that he should be given his share as agreed upon. Similarly, if it is agreed that the person who does not manage, or does not do more work, or does not do more important work, will get larger share of the profit, that condition is also valid and it must be fulfilled. If it is agreed that the entire profit will be appropriated by one person, or the entire loss will be borne by one of them, that sort of partnership is a matter of Ishkal. If it is not agreed that one of the partners will receive more profit, and if the investment of each of them is equal, they must share profit and loss equally. And if their investment is not equal, they should divide the profit and loss in proportion to their capital. For example, if two persons become partners, and the capital of one of them is double the capital of the other, his share in the profit and loss will also be double of the other, irrespective of whether both of them do equal work, or one of them does less work, or does not work at all. If it is laid down in the agreement of partnership, that both the partners will buy and sell together, or each of them will conclude transactions individually, or only one of them will conclude transactions, or a third party will be hired to conclude the transaction, they should act as agreed upon. If it is not specified as to which of the partners will buy and sell with the capital, neither of them can conclude any transactions with that capital without the permission of the other. The partner who has been given the right of discretion over the capital, should act according to the agreement of partnership. For example, if it is agreed that he will purchase on credit, or will sell against cash payment, or will purchase the property from a particular place, he should act according to the agreement. However, if no such agreement is made with him, he should conclude transactions in the usual manner, and carry on in such a way that no loss is suffered in the partnership. He should not carry any property belonging to the partnership, with him while he is travelling, if that is unusual. If a partner who transacts business with the capital of the partnership, sells and purchases things contrary to the agreement made with him, or concludes transactions in a manner which is not normal, because of the absence of any agreement, the transaction made by him in both the cases will be correct and valid; but if such a transaction results in a loss, or a part of wealth is squandered, then the partner who has acted against the agreement, or the usual norm, will be responsible for the loss. If a partner who trades with the capital of the partnership, does not go beyond the bounds of his authority, nor is he negligent in looking after the capital, yet unexpectedly the entire capital or a part of it perishes, he is not responsible. If a partner who trades with the capital of the partnership, declares that the capital has perished, and if other partners trust him, they should accept his word. But if they do not trust him, they can complain against him before the Mujtahid, who will decide the case according to Islamic laws. If all the partners withdraw the permission, given by them to one another, for the right of discretion over their respective shares held in partnership, none of them will be allowed the right of discretion over them. And if one of them withdraws the permission accorded by him, the other partners do not have the right of discretion; but one who has withdrawn his permission can exercise his right of discretion over the property of the partnership. If one of the partners demands that the capital invested in the partnership should be divided, others should accept his demand even if the period fixed for the partnership may not have expired yet, except when the division of the capital entails considerable loss to the partners. If one of the partners dies, or becomes insane, or unconscious, other partners cannot continue to exercise right of discretion over investment held in the partnership. And the same rule applies when one of them becomes feeble-minded that is, spends his property without any consideration. If a partner purchases a thing on credit for himself, its profit and loss belongs to him. However, if he purchases it for partnership, and if the agreement allows credit dealings, its profit and loss belongs to both of them. If the partners conclude a transaction with a joint capital investment, and it transpires later that the partnership was invalid, if the validity of the transaction was not dependent on mutual consent, meaning that, if they had known that the partnership was not valid, they would have still been agreeable to having the right of discretion over the property or stock of each other, the transaction will be considered valid, and whatever is gained or lost from the transaction will be shared by them. But if the partners would not have been disposed to agree to exercise discretion over each others' stock or property had they known that the partnership was not valid, yet they approve the particular transaction, it will be valid - and if they do not, it will be invalid. And in either case, if any partner has worked for the partnership without the previous intention to work gratis, he can collect the wages for his services at the usual rate, considering the percentage of other partners. But if the usual wage is more than his share of dividend, after having agreed to the validity of the transaction, he should take the dividend only.

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The Economic Situation of the Arabian Peninsula

Since most of the Arabian Peninsula consists of vast desert land, its inhabitants did not work in agriculture, except in the extreme borders on the peninsula – particularly in Yemen, in the south, and Syria, to the north – and in the odd scattered oases found in central Arabia. Without much vegetation in Arabia, it was sheep and camels that made for the livelihood of both desert and city dwellers. Tribes would go from place to place with their herds, looking for pastureland. As for industry and manufacturing, Arab were far, far behind other nations; they practically refused to work in those fields, instead allowing foreigners and slaves to do their work for them. Even when they wanted to rebuild the kaba, they sought the help of an Egyptian, who had survived the sinking of his see vessel in Jeddah, and who then settled in Mecca.It is true that, without farming and manufacturing, Arabs were, compared to other people, at an economic disadvantage; but they did compensate in another regard: They were an advanced trading nation, by dint of their strategically sound location between Africa and eastern Asia.It was primarily the city dwellers of the Arabian Peninsula who engaged in trade, and most successful among them were the people of the Quraish. The Quraish differed from others tribes in that they were the inhabitants of Mecca, which was considered to be holy by all Arabs; as such, they were able to travel safely all over Arabia, for no tribe dared attacked the dwellers of the inviolable city of Mecca. Other tribes did not fare as well; their trading caravans were constantly being subjected to high way robbery by individuals and other tribes that made a living through attacking and robbing passing caravans. God reminded the Quraish of this particular blessing in the Noble Quran:"Have they not seen that we have made Mecca a sanctuary secure, and that men are being snatched away from all around them? Then do they believe in falsehood, and deny the graces of God?" {Quran 29:67}The Quraish dispatched two very larger trading caravans on a yearly basis; one went in the winter to Yemen, and the other when in the summer to Syria. They went in safely, while other tribes while other tribes where constantly being attached and robbed. Throughout every year, the Quraish sent many lesser caravans to the various market places of Arabia (and perhaps even else where). God said:"It is a great grace and protection from God, for the taming of the Quraish, and with all those God's grace and protection for their taming, we cause the (Quraish's) caravans to set forth safe in winter (to the south) and in summer (to the north), so let them worship God the Lord of this house (the Kaba in Mecca) He who has fed them against hunger and has made them safe from fear." {Quran 106: 1-4}The caravans carried all kinds of merchandise that was available in the Arabian Peninsula – such as perfume, incense, spices, dates, ivory, beads, skins, silk garments and weapons. Some merchandise was produced in the Peninsula, but some was important from abroad. The trading caravans would carry such items to Syria and elsewhere, and would then return with full loads of wheat, grains, raisins, oils, and clothing.The Yemenis were also known for trading, for their economic activities were conducted on land and by sea; they traveled to the shores of Africa, India, Indonesia, Sumatra, and the islands of the Arabian Peninsula. Once the inhabitants of Yemen become Muslims, they used their previous travel experience and knowledge to help spread Islam to the above mentioned lands. Prior to the advent of Islam, Usury was practiced on a wide spread scale, perhaps having come to the Arabs from the Jews. In some cases, interest rates reached as high as one-hundred percent.Ukaadh, Majinnah, and Dhul-Majaaz were the names of the most famous market places of the Arabian Peninsula. Some historians relate that Arabs would congregate at Ukaadh at the beginning of Thul-Qaidah; after 20 days passed, they would go to Majinnah. And when they saw the birth of the new moon for Thul-Hijjah, they would go to Dhul-Majaaz, where they would stay for 8 days. Then they would go to Arafa for the pilgrimage. And neither in Arafa nor during the days of Mina did the conduct any business – not until the advent of Islam, for God permitted them to do business during these days."There is no sin on you if you seek the bounty of your lord (during pilgrimage by trading etc.). Then when you leave Arafa, remember God (by glorifying his praises, i.e., prayers and invocations, etc.) at the Mashar-il-haram (Muzdalifah). And remember him as he has guided you, and verily, you were, before, of those who were astray." {Quran 2:198}These centers of trade remained open during the early days of Islam, but eventually closed down. During their hay day, Ukaadh, Majinnah, and Dhul-Majaaz were not merely marketplaces; they were also centers of poetry and public speaking. Great poets and speakers gathered and competed against one another in their respective arts; thus they were centers that greatly served the advancement of poetry and the Arabic language.

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Construct A New Currency

The crisis in Asia and Latin America has been the economy and threaten the stability of developing countries, even the 1997 crisis and 1998 is a threat to the entire world economy. Mid-1997 crisis is also in Indonesia, even Indonesia is a country that suffered the most severe. Economic growth in previous years around 7% per year until the sharp slump - 13.7% and inflation reached 77.6% in 1998, which begins, the occurrence of the exchange rate fluctuation in July 1997. Europe tried to prevent the crisis by creating joint currency, the Euro, which initially lower the value of the U.S. Dollar, Euro, but now the value is higher than U.S. dollar. In 2008, the United States also experienced a crisis that affects the entire world crisis, the United States because of trade with other countries using the currency of dollars the United States. Learning from Europe, the Middle-East countries and Asia can also make a joint currency, for example, political or Dirham. Dinar is the currency in the Roman era and Dirham is the currency in the Persian era. Trade is the basis of the economy in Arabia before Islam came. Prerequisite for the transaction is the means of payment that can be trusted. Arabia and neighboring areas are under the direct authority of Persia and Rome. Unit of the money is used countries is the Dirham and the dinar. In the transaction of business Arabia in the second type of currency is also accepted. With more strong political both countries, the payment instrument is more trusted in the region that are under the influence of power. Because of that factor, the Persian nation and the nation's Roman is the only trading partner of the Arab people (Sadr, 1989). Dirham coin and the dinar has the weight and still have the content of silver or gold that remains. However, during the dynasty Umayyah and weighing Abbassiyah dynasty changed, so also in the Persian own. In the period after Islam, the content of silver coins Dirham between different areas of one to the other, but in the early Islamic period has been fixed. At this time the amount of charity gold and silver as mentioned in the book is based on the severity of the holy Dirham and the dinar coin set in the early Islamic period (Kattani, 1975:413). Value of one dinar equal to ten Dirham (Sadr, 1989). But in the Dynasty Fathimiyah namely in the Al-Hakim bin Amrillah dinar price equal to 34 Dirham because many Dirham mixture (Al Maqrizy, 1988:70-80). In dinating the Ottoman period, the official financial system Utsmaniah since 1534 Base on the goods in gold and silver mines, with 1:15 (Imarah, 1993:101). In addition dinar and Dirham, there is money to meet the needs for goods sales slightly cheaper price of one Dirham or part of the Dirham, because the first since up to now people need a tool to exchange other than gold and silver. To meet the needs of the purchase of cheap goods, they print a few of copper in the process of small pieces of money given name (copper cash) (Al Maqrizy, 1988:90). Value of money compared Dirham in the early Islamic period is 1: 48 (Al-Hallaq, 1986:17). Value does not keep the money to increase the copper Dirham in the year 756 H with a ratio of 1: 24 (Al-Sayuthi, 1975:104). Dinar and Dirham is the currency stable world from the beginning of Islam until now. Inflation in 1400 after years is zero. The price of chicken in the Messenger of Allah s.a.w. 1 Dirham and now is still about 1 Dirham (Vadillo, 1998). Dinar currency is ideal to facilitate and improve international trade and minimize speculation in the paper money that can trigger the Asian currency crisis of 1997. The existence of a fund unity between the countries of East and Central Asia will increase the quantity of trade between the countries in the region and help enhance economic development if the condition of providing money dinar were successful. Currency idea to help minimize the gold dinar currency hagemoni dollars the United States and once again use the dinar as an international currency because the value of paper currency continues to fluctuate sepertimata not have the money value of gold is stable and durable, their value is the value of the metal itself.

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