An Operations Manual Will Guide Your Employees, Customers, Suppliers and Your Banker!

The development of an Operations Manual may seem like a daunting task.

Many small business owners have stated, “We only have a few employees, why do we need an Operations Manual”?

By creating this manual you will eliminate many of the frustrations you may be experiencing today including:

  • Why aren’t my employees motivated to do the right job?
  • Why do I have to do everything myself?
  • Why is it so hard to find good employees?

Like so many important tasks in your business, there are several steps to take in developing a workable Operations Manual but none of these steps are overwhelming.

What should you use as your guide?
There are four groups that have a significant impact on your business, they are the influencers in you business. Who are they:

  • Your Customers
  • Your Employees
  • Your Suppliers
  • Your banker (or stock holders)

So where do you get started?
Your manual must be tailored to your business and be based on the “vision” you have developed and written for your business. When you started your business you had a “big dream or vision” for what you wanted to accomplish in the business world. Can you clearly state what that vision is?

Who needs to buy-in to your vision?
The groups that have the greatest impact on your business; your customers, your employees, your suppliers, and your banker (your business influencers).

First lets focus on your employees and customers.
One way to “crystallize” your vision with employees and customers is to use the Revolutionary Service survey. Ask your employees to complete the survey and see what they say about the policies, practices and procedures in your business. They will tell you if they are working or not. You will gain insight that you may not have had in the past.

If you have used the Revolutionary Service survey, were you able to get some ideas? What insights have you gained?

Using this survey should give you some ideas on how to remain focused on the needs of your employees and customers. You will be able to get a few good clues on how to “empower” both groups.

Employees want to feel they can make a significant and positive contribution to your business and customers need a clear understanding of how your policies, procedures and practices work to remain a loyal customer.

Did you notice that the Revolutionary Service survey focused on questions regarding your policies, procedures and practices?

What are your policies, practices and procedures in your business? Have you documented all of these areas? If you have not, how will your customers and employees know what to expect from your business?

If you are frustrated because your employees don’t seem to be motivated, it may be that your policies, practices and procedures are not understood. In most cases when employees know that they can take responsibility for solving a customer “issue” they normally feel motivated to do so.

Have you placed obstacles in their way. What do the results of the Revolutionary Service survey tell you?

What are the policies, procedures and practices you need to document.

Here are a few suggestions to get you started:

  • the sales process – how do you attract and retain customers?
  • 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, lets focus on how you share your vision with your suppliers and your bank?

Periodically, you will need the help of banks and/or suppliers. They need to understand the vision if they are to support the dream and positively impact your business.

How do you share the vision?
Lets look at the needs this group of influencers have.

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.

Preparation for loans, grants and credit is much easier today than in the past. There are several software programs to help apply for a loan or making a presentation to a supplier. PaloAlto Business Plans offers a reasonably priced set of tools specifically designed for small business, they come highly recommended.

The toughest part of creating an Operations Manual is getting started.

Where do you start?

  1. You must describe the activities in which you are involved. (The What)
  2. Why you do what you do (processes or systems used). (The Why)
  3. How you get it done. (The How)

Where does all this documenting lead you?
Once you have activities documented (written down) you can begin the process of setting standards.

Why is creating standards so important?
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, suppliers, customers, and bankers (stock holders) 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

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