How To Create An Operations Manual For Your Business
Having a written plan is important to any business, big or small. Putting the standards you set for yourself and your business on paper will not only help you create consistency for your business, it will help you to avoid a pitfall that many small business owners face; Being able to maintain the quality the business owner has set for the business as they grow and hire new employees.
Too many times a business with a rock solid level of service starts to slowly degrade as they grow and new employees are added to the mix. A written operations manual will help give you the discipline to stay on track as your business grows.
A Business Plan is Not an Operations Manual
Most likely when you were first starting your business, everyone was telling you that a written business plan is a must. You need to get your vision, your plan and financials on paper so you (and your bank) can see that you have thought things through and have a clear plan of how your business will make money.
Once your business is actually up and running, how many times do you think you will refer back to your business plan? If you are like most people, the answer is somewhere between rarely to never. A business plan is just that, a plan for your business. It’s an overview of what your business is about and how it will make money. It’s your vision of how you see your business now and in the future. While this is very important, you also need a written plan on how you will run your business, day in and day out. This is where a written operations manual becomes so important.
The Entrepreneurial Model has less to do with what’s done in a business and more to do with how it’s done. The commodity isn’t what’s important—the way it’s delivered is. – Michael Gerber, The E-Myth Revisited
What is an Operations Manual?
An operations manual is something different for every business. For some it may be a 1000 page, phone book sized manual, detailing every little detail of the business in a step by step guide. For others, it may simply be a series of checklists that are stored in a binder or as an online document. The only requirement is that you have some sort of written plan that you and your employees can reference when they need to know something.
While many operation manuals will be chock full of details such as the company’s mission statement, values, organisational charts and sections for each key component of a business, you do not need all of that. At least not when you are just starting out. I think this is the misconception that many people face when it comes to writing an operational plan for their business, it does not have to be large and comprehensive, it just needs to be useful.
“Planning is an unnatural process; it is much more fun to do something. The nicest thing about not planning is that failure comes as a complete surprise, rather than being preceded by a period of worry and depression” (Sir John Harvey-Jones)
There are lots of reasons for having a written operational plan for you business, the ones I feel are most important are:
Create a standard for your business.
For the most part, customers would prefer consistency from a business over random and inconsistent acts of awesomeness when it comes to customer service. If the owner gives a customer one experience but your employees give that same customer (usually not as good) another experience, it will confuse and diminish the quality of the business in the eyes of that customer. A written plan will make sure everyone knows what expectations you have set for your business and employees.
Better trained employees.
If you are like most small business owners, you probably walk new employees through every step personally, explaining what needs to be done and what you expect from them. Do you do the same exact thing for every employee that you hire? Probably not. What will happen if your manager needed to start training new hires? Would the training be the same? A written training plan will ensure that all new hires are given the same information to help create consistency among all of your employees. It will also allow you to delegate some training responsibilities to other employees without diminishing the impact of that training.
Easier to scale your business.
To take a quote from Michael Gerber in The E-Myth Revisited, “How is it that McDonald’s can deliver on it’s customer promise in every one of it’s 20K plus restaurants, each and every day, when a small business owner can’t do it with a single location?” You can say a lot of things about McDonald’s but the one thing you can’t say is that they are inconsistent. When operating multiple locations, or even franchising your concept, it’s impossible to deliver on your brand promise without a comprehensive operational plan in place.
Make your business more valuable.
One day, for various reasons, you may need to sell your business. Telling a prospective buyer “This is the way I do it” and “This is what I tell my employees” is much less valuable in the eyes of a prospective buyer than “Here is the way we operate our business”. Nobody is going to want to buy the ideas in your head, they want something tangible, proof that your business is an actual business, not you running around telling everyone what to do. An operations manual will be proof that there is an actual business going on here, something that can run with or without the owner present. Now that is valuable.
“Reduce your plan to writing. The moment you complete this, you will have definitely given concrete form to the intangible desire” Napoleon Hill