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How To Create An Operations Manual For Your Business

Create operations manual for businessHaving 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. 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.

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, organizational 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)

Why Do You Need an Operations Manual?

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 alot 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

What Should You Put In Your Operations Manual? The most important thing when writing an operations manual is for it to be useful, otherwise it won’t get used.  Start with the information that you will need to reference the most and would like to keep handy.  Whenever I help to create a written plan for one of my clients, I usually start with the following:

  • A contact list for all employees, vendors, emergency numbers, insurance company, landlord (if you have one) and anyone else that may need to be contacted in case an issue arises and the owner is not present.
  • A series of checklists on the basic functions of the business.  Create checklists for cleaning, opening/closing the business, supplies and any other task that requires easy and repeatable steps to follow.
  • How to guides.  Create simple “how to” guides that you and your employees can reference in various situations.  If the POS (Point of Sale) machine crashes on you in the middle of the day, do your employees know what to do?  Create a quick guide outlining the steps on what they should do if this should happen.  What if an employee needs to call in sick?  There is an injury in your store?  Write simple 1-2 page guides on what needs to be done in each case.
  • Policies.  While i’m not a huge fan of policies (i know they are needed, they are just not always used for the right reasons), outline your customer policies (or promises if that’s what you call them) so all of your employees are on the same page. Refund, exchange and payment methods are all good policies to start with.

Once these sections are complete I like to concentrate on the daily operations of the business.  I start here because this is (hopefully) the first part of the business that you can start delegating to others.   Just like in the “how to guides” above, start creating “mini guides” of your daily operations.  It may include ordering procedures, daily tasks that your manager must ensure is completed every day or anything else that is relevant to your business that needs to be done on a daily basis. If you only created the above sections for your business and stopped there, you should be proud of yourself because most small businesses will go their entire existence and never even get that far. As you can probably see by now, a written operations manual is made up of a series of short sections that are strung together to create a bigger manual.  It’s actually very easy to start creating one, just start with the sections outlined above and you will be on your way to having your own written plan for your business.

Resources

Creating your operations manual.  There is no easier way that I know of to create training guides than with Screen Steps. One of the biggest headaches in creating a training manual is inserting screen shots and images, if you use Microsoft Word you know what i’m talking about.  Having to take a screen shot, download the image, insert it in the document and then re-size it is a major pain and consumes alot of time. Screen Steps let’s you  snap a screen shot of your computer screen and automatically inserts the image into your document in about 3 seconds without having to download the image first.  Screen Steps is the reason that I actually enjoy creating how to guides for this blog. Hosting your operations manual online.  I’m a fan of Google Apps and use it for all of my businesses.  What I do is upload the finished documents to my Google Docs account and then create a password protected intranet site using Google Sites to host the manual. It can then be easily accessed by any employee from any computer.  Both products come free with a Gmail or Google Apps account.  I hope to come out with a video tutorial shortly outlining exactly how to set this up so stay tuned. Three Ring Binder.  After I upload each document, I print a copy to place it in a three ring binder which is left in a spot where employees can easily reference it when needed.  I use page inserts to keep the pages from tearing and use tabs for easy reference.

Start Creating Your Manual

I have outlined why and how to start creating your own operations manual for your business.  As you can see it’s easy to get started, you just have to start. Making it relevant to your business and employees is the key. Your operations manual will never be complete, it will always need revising so don’t think of it as something you need to do all at once.  When you find things that work for your business, take the time to write them down and add them to your manual a little at a time.  It should grow and change over time,  just like your business.  I usually take a few hours quarterly to update and revise my manual. If you have questions about getting started, shoot me an email at gary[at]thesmallbusinessplaybook.com.  I respond to all email requests.  Cheers.

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Gary Shouldis is a father, husband, business owner and avid blogger. He is the founder of 3Bug Media, a web marketing company helping small businesses grow their online presence and bottom line. When he’s not working, you can usually find him being chased through the park by his 4 children.

31 Responses to How To Create An Operations Manual For Your Business

  1. Chantel says:

    This was a really helpful post! Even before your business really starts to grow, it helps keep you on track with daily operations.

  2. Having a plan and keeping yourself organized while you are small is the key to remaining that way as you grow. Thanks for the comment!

  3. Georgiana says:

    I do not own a business so I do not need this information. However, it sounds very helpful. I’m pretty sure every business owner will thank you for this.

  4. Sabina Cao says:

    Great ideas and really helpful post, thanks! Growing in scale can really really be a problem for some companies!

  5. Thanks for the comments Sabina, every business needs some sort of written plan if they want to scale their business beyond a single owner.

  6. Dorothy says:

    This has been a very helpful post. We opened our store one year ago, and I am beginning to write our operations manual right now. I feel like the manual is a natural second step after writing a business plan. Thank you for your help!

  7. Thanks for the comments Dorothy. Creating an operations manual takes alot of time and patience. It’s something you put together a little bit at a time. I find the best and most effective are the ones that are a series of how to’s for the business, a sort of reference manual. A great tool that I’ve written about in the past is Screen Steps from Blue Mango learning, I haven’t come across a better tool for creating a processes for your business.

  8. Oliver GO says:

    Thanks for the helpful tips for creating a operations manual! This helps me a lot! Thanks again!

  9. [...] of what an operations manual is and what needs to go in there, check out this article I wrote on how to create an operations manual.  Once you’re familiar with what you’re supposed to do, I wanted to show you some of [...]

  10. Catherine Heath says:

    Excellent set of instructions! Just what I was looking for.

    • Glad you found it helpful Catherine. Any questions, feel free to contact me. Cheers!

      p.s. If you sign up for my email list, I’m going to be giving away a lot of helpful materials around operating manuals and small business in general, It’ll be free to my email subscribers.

  11. jon stephens says:

    interesting article :-)

  12. Bonnie says:

    Thanks for the great article! :)

  13. Tony Dehnke says:

    Thanks, I want to start this using a wiki type of format on something like google sites so we can have install procedures documented, how to handle situations etc.

    How have you found is best to setup google sites to do this?

    • The easiest way is to segment your manual into individual documents, with each section or topic being it’s own document (it depends on how granular you want to make it) Once you have all of your individual documents uploaded, you can create a page in Google Sites where you can simply provide a link to each individual document in Google Drive. You of course will have to organize the links in the format of an operations manual and will use contextual links (text describing the topic instead of inserting the actual url of the document). This method will make it easy to view the entire document on a single page and be able to click on each individual section instead of having to scroll through the entire document to find something. If that’s confusing, feel free to email.

  14. […] How to Create An Operations Manual for Your Business […]

  15. Paige Bodie says:

    This was very helpful! gave me a better perspective on what steps to take! are there any books you recommend for further info on creating these manuals? Thank you Paige

    • Hi Paige,
      As far as creating a system for your business, I highly recommend “The E-Myth Revisited” by Michael Gerber. Great book on what it’s really like to start a business and how to create systems for running your business.

  16. Jacque says:

    I sure do wish I could hire someone to come in and do this for me-any ideas?

    • Two choices that I would look at is to hire a college student to help transcribe for you. Or to go to a freelance site like Odesk or Elance and hire someone who is familiar with process documentation. The tool listed in the article, Screensteps is a great tool to use for creating an operations manual. Message me if you have any questions.

  17. Adriana says:

    Hi Gary! I found this article very interesting, thanks for posting it. I’d like to ask you some questions I have, I am doing my thesis and it would be very useful to have your point of view. I tried to send you an email to the adress you put above but it seems to doesn’t exist. I’ll appreciate your answer, thanks!

  18. Thank you Gary, this was helpful.

  19. Daniel says:

    Was looking for something like this. Thank you!

  20. Castle Ink says:

    Thanks Gary. I always find the biggest obstacle is time. But clearly these sorts of operating docs are critical and deserve being the priority.

    • Yes, it’s a big project but you can easily break it down into small chunks. Each section is really just a few pages for a specific procedure. You don’t create an operations manual at once or even in the beginning, it’s created over time and revised on a regular basis.

  21. Bruno says:

    Is there any book you recommend on the subject? Creating a Manual of my business it seems to take a lot of work.

    • No books that I can think of off the top of my head. A good book about creating processes for business is The E-Myth, by Michael Gerber. It is a lot of work, but you shouldn’t try and create it all at once. It can be broken down into sections, and each section a series of short “how to” and informational guides on specific processes for your business. Every operations manual is different, some are just covering processes, others, like in franchising, became the “bible” on how to run every aspect of your business.

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