Creating an Operations Manual: The Toughest Part Is Getting Started

An Operations Manual: Where do you start?

1. You must describe the “key” activities in which you are involved (create a list of five or six key activities in your business).

2. Describe the processes and systems that are used in the business today (examples are: bookkeeping, sales reporting, inventory management, expense control, forecasting, budget control, etc.)

3. Describe how you want the work in the business to get done.

First , Let’s Focus On Customers And Employees

Why create standards?

You will be able to measure how you and you employees are performing.

It creates an environment where everyone involved with any part of your business can be “measured on a fair and equitable basis".

You are creating “structure” where it may not have existed before.

Without structure, you make the job of improving your business very difficult and especially time consuming.

The four groups that influence your business (i.e.) employees, customers, suppliers, and bankers want and need “structure”!

They demand an Operations manual. You owe it to them!

Are you saying to yourself, “If I create an Operations Manual I might ‘stifle’ creativity”?

McGraw-Hill did a study in 1993, which measured employee job satisfaction.

The study concluded, “When the employee was aware of the standards by which they were being evaluated and compensated, they stayed with the company for twice as long as the average in the study and were 70% to 80% more productive.”

Compelling statistics, aren’t they?

Here are a few suggestions to get you started:

• The invoicing process - how will your invoice inform and demonstrate the value the customer receives?

• The shipping and delivery process - how will they customer receive the goods and/or services you provide?

• The facilities from which you operate - how will your business appear to your customers, inviting or threatening?

• The purchasing process - how will you acquire the goods and services you need to run the business?

• The accounts payable process - how are the bills paid, who is responsible for payments?

• The accounts receivable process - when and how is the collection process conducted?

• The work rules - hours of operations, dress code, attendance at work?

• The Human Resource processes - policies associated with hiring, termination, benefits, promotions, demotions, harassment, disciplinary procedure, etc.

• The Information Management process - use of computers, filing systems, storage systems?

This list is only a beginning to get you started in developing an Operations Manual.

Second, let’s focus on how you share your vision with your suppliers and your banks.

They will need to understand your vision if they are to support the dream and positively impact your business.

How do you share the vision?

Suppliers and bankers have a high level of interest in knowing how they are going to receive payment for goods and services as well as loan re-payments.

Unless they have a clear understanding of how you will continue to operate they will not be willing to take a risk on you or your business.

Many business owners struggle with describing their vision to suppliers and bankers.

The reason for this is simple.

The frequency of applying for funding (loans or grants) and adding or changing suppliers is limited. It is not uncommon to make only two or three presentations a year.

You must be at your best when making presentations to bankers and suppliers.

The opportunities to describe how your business works and how you will be in a position to pay off a loan or purchase goods on credit terms is absolutely vital in making your business grow.

You must know the correct steps to be successful in securing loans and purchasing goods and services on credit.

Preparing an Operations manual is a valuable tool in describing how your business works.

Your Operations Manual allows an inside view to your business. Loan officers and suppliers demand a view inside your business. You owe it to them.

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