Operations Manual – the Requirements and Easy Tips for Updating

This entry is kicking off a short “How To” series here at Financially Simple. Each installment in the series will focus on a different subject and how to execute it. So, today’s entry is all about how to make an operations manual. More specifically, I’m going to look at how you can use technology to optimize your operations manual.

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TIME INDEX:

• 00:50 – How to Use Technology to Accelerate Your Operations Manual
• 04:29 – What’s in the Operations Manual
• 06:31 – Does it Matter?
• 09:59 – Where to Start
• 15:07 – The Results
• 17:00 – Summary

Encyclopedia Britannica & Throughput

I’ve always been an avid reader. In fact, I read an average of around five books per month. My thirst for knowledge has always been insatiable in that regard. I can remember getting a complete set of The Encyclopedia Britannica delivered to my home when I was a young boy. As I began to read through the pages, I was just fascinated by the wealth and breadth of information contained within them.

There were pictures and diagrams of ancient cultures and their timelines. Likewise, each event throughout humankind’s history could be experienced and understood through its words. As an adult and an entrepreneur, my reading interests have shifted to books about business and personal growth. One title that I’ve read over and over again is Eli Goldratt’s The Goal.

In this book, I first heard the term “throughput.” It is how you move clients, customers, and products through your company promptly while taking on the least amount of liability possible. One way to improve the throughput of your company—especially in the operations—is to create a manual. This manual (or encyclopedia, if you will) explains how your company operates.

If you look at it in the sense that your operations manual should be the encyclopedia of your company, that is a daunting task. So, with that much detail, how do you optimize your operations manual?

What’s In the Operations Manual?

There’s a pretty common consensus on what should be included in your operations manual. Typically, there are five key areas to focus on. These areas consist of:

• Organizational Chart. This is just the standard organizational chart outlining how the company is organized from the CEO to the most junior associate.
• Job Description & Contact Information. This area will detail exactly what each position listed in your organizational chart is responsible for and how to get in touch with them.
• Business Processes. Your business processes will take up the largest space in your operations manual and usually cause business owners the most trouble when creating the manual. In this section, you will outline each of the processes that take place within your business. The thing is, we usually conduct these processes through habits and don’t really think about the fact that we’re doing them. That makes writing them down a little more difficult.
• Business Policies. If your business has policies and guidelines that your team must follow, this is where they should be documented. For example, you might deal with highly sensitive information and, therefore, have a policy in place that prohibits your team from having their cell phones in your office. If so, outline the policy and what actions will be taken if it is violated within this section of your operations manual.
• Emergency Procedures. This area details your contingency plans for emergency and disaster situations. For instance, if your building were to burn down (God forbid), what would your team do? Who would they report the incident to? Where would they meet? How would they continue to conduct business while repairs are being made? These are the things that need to be in your emergency procedures section.

Does It Matter?

At this point, you might be thinking of all the things that you are responsible for daily. If you are, then you’re probably saying, “Justin, I don’t have time to do my normal daily activities. Much less creating an encyclopedia of information about my business! Does it even matter?” Truthfully? Yes. It matters a great deal, and here’s why…

Working to optimize your operations manual helps to create an efficient throughput. You see, as you begin writing down all of the processes that take place in your business, you begin to notice the areas that you’re missing something. By going through each step of your day, you will find things that aren’t efficient.

Additionally, developing an operations manual creates “evergreen” knowledge. This is important to your business because you don’t want to have to continue to repeat the same information again and again. In my own business, we are in a period of rapid growth. As a result, I found myself explaining the same software and service processes on a constant loop. Rather than doing this, I created an operations manual that saved time for myself and provided evergreen knowledge to new clients and team members.

Finally, your operations manual creates employee accountability. As a business owner, it is easy to become so busy that you skim through training your team. That’s why having the operations manual in place can be valuable in training and holding employees accountable.

Where Do You Start?

Now, you’re in a position where you know what should be in your operations manual and why it matters. But beginning to optimize your operations manual is still a daunting task. So, what do you do? Where do you start?

I have a client that has seen unbelievable growth in her business over the last two years. As a result, she is now in a position where she needs to relinquish some of her responsibilities to a new employee. For the sake of keeping things simple, we’ll say that she’s hiring someone to pay the bills in her company.

When she and I sat down to discuss this, I asked her how she would train this team member. She replied saying, “I will sit down at my desk and walk them through the process in front of my computer.” Since she was already going to be in front of her computer, explaining the step-by-step process of paying bills in her company, I suggested that she turn on her webcam and record the training via Zoom (or another program like it).

By doing this, she is using technology to create and optimize her operations manual. Likewise, she could use her cell phone to record how she walks through the warehouse to observe their business processes. You see, the technologies that we use daily can help you to create a library of processes, training, procedures, etc., that can then be handed off to a virtual assistant who will compile the footage into a written operations manual.

This client’s company was shut down during COVID and finished with more revenue and operating income than ever before. Why? Because they took a little time to use technology to build an operations manual and improve their efficiencies.

Quick Tip…

Friends, I know that you’re busy. Creating an operations manual may not be something that you’re excited about doing. But like my client, you can simplify the process by using tools like Zoom, Go To Meeting, or even just the recording app on your cell phone. There are plenty of virtual assistant services that can take your raw audio and video files and turn them into a completed operations manual.

Look, I know that life is hard. But life is good. Working to optimize your operations manual can be frustrating. But if you take advantage of the technology you already use, you can make it financially simple.

If you’d like to work with Financially Simple’s business experts, schedule a meeting with us. We look forward to hearing from you!

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