An Operations Manual for Your Business (and Why You Need One)

Having an operations manual may not be glamorous, but preventing the disasters caused by human error and bad processes can save your business and even (in extreme circumstances) millions of lives.

A perfect storm of 6 human errors — culminating with staff thinking it was ok to turn off the emergency cooling system — caused the Chernobyl disaster, costing an inflation-adjusted $720 billion, 30 deaths and an extreme amount of unsafe radiation.” – Ben Brandall, How Processes Protect Your Business From Crashing and Burning

The truth is, the only way to prevent such errors is to document workflows and processes, and the only way to make sure your employees know what they have to do, how to do it, and have the resources to do it is to create your own operations manual.

What is an operations manual?

An operations manual is the backbone of your company – the encyclopedia for your business. Your employee handbook may introduce your team to your mission, various policies (benefits, holiday leave, security), and culture, but the operations manual will show them how to do their job and give them everything they need to do it.

Typically the manual is either a book or folder of printed documents containing all of your standard operating procedures (SOPs), your hierarchy, contact details and emergency procedures. Whenever an employee wants to know how to do something or needs to know how to contact someone, they can look it up in the manual.

Imagine a manual for a car. In it, you’ll be told what the model is, what the tire pressures need to be, and a myriad of other useful facts which are important to know, but not necessarily off by heart. An operations manual is exactly that, but for your company.

It’s a way of making sure that your team can reliably and efficiently carry out their tasks with consistent results. Human error is reduced to a minimum and everyone knows precisely what they need to do, who they might be waiting on, and who might be waiting on them to deliver results.

Why is having one important?

Think of the last time you or a team member had to complete a task, but they had no idea how to do it. In all likelihood, the task was completed only after either researching how to complete it (and wasting time in doing so) or by disrupting someone else to get them to explain.

With an operations manual, you avoid all that hassle and just get down to what you need to do, letting you make the most of your time rather than working at half-pace. Think of it as an employee knowledge base – a place that anyone can go to when they have a question or need something explaining, rather than bothering somebody else.

Processes are documented clearly

One of the biggest advantages of having an operations manual is that it forces you to have fully documented processes for every task you do more than once. This might sound like a pain to set up, but the long-term benefits for having them are massive.

Aside from increasing your efficiency and highlighting problems in your current processes, the consistency your business achieves is at the core of why processes are important. By having a method which can be executed perfectly time after time you’re standardizing your business model, making it easy to find problems and dealt with them.

It allows you to scale

Without a consistent and reliable business model, it’s next to impossible to scale your business. By having an operations manual to store your SOPs and important internal data, you can easily onboard new employees and identify the factors limiting your ability to scale.

Not only that, but having documented processes in the first place will mean that your operation runs with less wasted time and money, making it able to rapidly expand

Everyone is accountable

A major part of reducing human error is to make everyone accountable for their actions. By detailing the company hierarchy, job descriptions, and parties involved in a given task, you’re effectively keeping everyone accountable for what they need to do, and who they need to talk to if there’s a problem.

In other words, nobody can argue (with someone else or themselves) that a task or duty isn’t their responsibility, and the fact that anyone can access the operations manual means that everyone else will know it too. The knowledge that everyone else knows what you’re responsible for is a brilliant motivator, so your team’s output should also increase.

Important resources and processes are centralized

You could document your processes, hierarchy, job descriptions, emergency procedures, and more all without creating an operations manual. After all, it’s only once they’re collected in a single location that they turn from random files into a coherent document.

However, by centralizing all of this information you’re making sure that everything is available for anyone who needs access at any time. There’s no question about whether the process you’re following is the most recent version because everything is always up-to-date and stored in the manual.

Admittedly, this will depend on the format of your manual. A physical file (a book or folder) will need to have items reprinted with corrections or potentially even a complete re-issue to avoid lengthy and confusing appendixes. Digital operations manuals do not suffer the same problem, giving them an advantage over physical copies.

What to include in your operations manual

Much like with an employee handbook, the challenge here is to include enough detail in your operations manual to serve as a comprehensive knowledge base for your team, but not so much as to bore them into complacency.

If you go into unnecessary detail, you’ll either make them want to skip the instructions or leave them more confused than when they started, making the entire thing pointless. Not enough detail, however, and your team won’t have enough information to correctly and consistently perform the task.

To this end, you’ll need to include sections for your:

Company hierarchy

Job descriptions

Contact details

Documented processes

Emergency procedures

To give you a better idea I’ll tackle each of these sections in turn

Company hierarchy

Here you need to explain the layout of your company, kind of like stating the “family tree” of who reports to who. There’s not much to explain here in terms of content (since it will greatly vary depending on your size and layout), but you do have a couple of options for how to present it.

For example, you could create a text document and use subheaders to separate the various teams, with a brief description of who reports to who. I’d recommend using a visual flowchart to do this instead though, as all you really need to show here is the order of things, and a single chart is much easier to follow than a long-winded document.

Try to focus more on the job titles than specific people (eg, managing director), as then you won’t have to go back and make changes whenever your hire someone new or someone changes position.

Job descriptions

If the company hierarchy is a scannable chart, your job descriptions list is the information to back it up. While not necessarily job descriptions (although fee free to use them), here you should be going through each role in your business and laying out their responsibilities, skills, who they answer to, and who answers to them.

In other words, give an overview of what the position is in more detail, but keep it in context of the hierarchy. That way if someone isn’t sure as to who to contact about a particular issue (or wants to collaborate over a specific task), they can skim the hierarchy to get an idea of who to contact, then confirm it through the job description.

Contact details

Here you need to provide contact details for everyone in your company, and those outside who are in close contact. Easy.

You could combine this part of the operations manual with the job description section if you want to have a more compact document, but having a separate list of contacts can make it easier to skim through and immediately get the correct information.

Documented processes

Your documented processes will be the largest section of your operations manual, especially as your company grows. The trick is recording them in a way that’s comprehensive, but easy to follow.

Whether you’re using a word processor or a better piece of process documentation software, you’ll ideally have a set of checklist templates which give basic instructions to complete various common tasks. These are best separated into categories (such as “accounting processes” or “editing checklist“) since you should be documenting anything that you need to do more than once to make sure you have a consistent approach to it.

Emergency procedures

Finally, any emergency procedures should also be stored in the operations manual. “Emergency” could mean anything from a server security breach to an onsite fire – if it’s possible and could result in damage to your company, product, and/or staff, at least take note of it and draft out a procedure for dealing with it.

You don’t have to cover every situation under the sun, just the most likely ones to occur, and give the best way to limit the damage.

Don’t let your operations manual bore your team to death

The cardinal sin I’ve seen by scouring Google for useful operations manuals is that everything is dull to the point of being useless. Doing this is a one-way ticket to invite disaster once more, as your employees will be more likely to ignore your processes in favor of relying on memory.

So, rather than invite a Third World War, make your operations manual detailed enough to be useful, but simple enough to follow without sending the reader to sleep. Your company (and the general population) will thank you for it.

Originally published in Process Street.

Ant & Bee Stories can help you to create a systems-dependent business, which includes an Operations Manual. Check out how we do this. Or Contact us if you want it already.

Feeling stuck in your business? Here’s how these people turned things around.

Ruwandi and Jagath, her husband, own a restaurant business, “The Family Treat”. They make a cool 100k rupees a month in profits.

She’s the face of the business. Her clients love what she’s done with the place. They love her husband’s food.

For Ruwandi and Jagath, the restaurant is their baby. They’ve spent nearly 4 years growing it and developing a loyal customer base.

They’ve got a good team to help too. Ruwandi is the manager of sorts, and Jagath is the head chef. Then, there’s Joshua who works as the accounts person. Shalindi is in charge of procurement, and Shane does the marketing and social media work.

The first year was a struggle. It was just her and Jagath running things. They invested all they had on this business. And Jagath was so supportive. They had a passion for food, and that’s what mattered.

And once the hurdle was passed, and the 2nd year came around, they started to break even in the business. Getting good reviews and referrals from loyal customers surely helped.

They actually started making a profit last year, after they introduced catering services. Running a restaurant wasn’t what people made it out to be.

But all Ruwandi and Jagath have to show for the 4 years of commitment to the business is the small profit they’ve been making since last year. Business is business, but Ruwandi feels like this isn’t what they signed up for.

Worst of all, Ruwandi and Jagath can’t remember why they started the business in the first place. Before, they used to go abroad on vacation, at least once a year. Now, they only left the business if it was for a funeral or someone’s wedding. Even then, it was only for very close family and friends.

The baby they both lovingly grew is starting to strangle the both of them.

They open the restaurant at 9 in the morning. 6 am if there’s a catering order to prepare for. They close up and get home around 11.30 in the night. Ruwandi has to be there during the peak times. She’s the face of the business. Jagath can’t trust anyone else to make the food the way he does.

They are swamped, and that’s an understatement. They are stuck. Ruwandi feels suffocated most days. Jagath feels numb.

The thought of selling the business crossed their minds several times during the years. But who’d buy it? There’s no restaurant to speak of without these 2. They are the glue that’s holding things together.

On the strong suggestion of a family friend, they decided to hire a consultant to systemize and document the business. Maybe they could stand a chance of selling it for the price they wanted.

Not that they really wanted to. But the option allowed some much needed breathing space.

Either this or spend the rest of their lives like this. Stuck in limbo.

Enter Michael. A Process consultant.

Michael was brought in as a last ditch effort to salvage their lives and that of the business. He was their hope.

He helped them structure the business and create an Operations Manual. Until now, Ruwandi and Jagath had a person-dependent business. Michael made it systems-dependent.

He mapped the entire operation. Every title and task had an accountability, responsibility, and an outcome. The people were merely there to run the system.

Ruwandi used to be the face of the business. Now, the face of the business was the brand. A family run restaurant where staff and customers were treated like family.

Jagath now could begin to delegate some of his work in the kitchen. Thanks to the systems. He hired a sous chef, and began to train him using the manual. And it was easy, since the manual was, basically, a list of Jagath’s routine in the kitchen.

Like Ruwandi and Jagath, the rest of the staff had accountabilities, responsibilities, and outcomes for their roles. If one person wasn’t able to show up, another could easily handle the extra work. It was all there in the manual.

All of a sudden, Ruwandi and Jagath could take a few days off from running the business. The system could run it for them. When they came back, it was with new energy.

Then they started taking longer vacations. They went abroad for the first time in 4 years. It felt great. Free at last.

Now, their restaurant didn’t feel suffocating or numbing. Their passion for the business was rekindled.

All thoughts of selling the business was gone, though the option was there. As a last resort.

They hired a manager to run things full time. Ruwandi and Jagath were able to dine in their restaurant for the first time – as guests. It was a new experience. Like looking at the business from the outside.

In time, they opened another restaurant in another location. Running a restaurant, now, was as easy as ‘copy-paste’. They had the brand, and the systems.

If you run a business that’s making you feel stuck and suffocated, we’d love to help change that. Check out how we can help you or contact us if you want what we have to offer.

Profit Isn’t Everything, It’s The Only Thing

Management myths are ruining businesses.

There are many management tips and tricks floating around there, and most of them fail to address one critical aspect. That is, profit.

Profit isn’t everything. It’s the Only thing.

Managing for Profit

Why are you in business? To make a profit

If you’re spending time, effort, or money on your business, why is it? To make a profit

So, when management is concerned it should be to make a profit.

Not to be the best boss of the year, or the most enjoyable work place of the year.

If you achieve these things after turning a profit, then consider it an added benefit.

When you’re hiring employees, what are the things you look for?

Most business owners would say tings like, “reliable, honest, loyal, trustworthy, intelligent, motivated, etc…” Now, all of these traits are useful to have in an employee, IF he/she has one key aspect: profitable.

The only employee you need as a business owner, is a Profitable Employee.

The only reason to have an employee is to make a profit. Period.

Not because you have a friend, not because you want to provide jobs for relatives, not because you don’t like working alone, or you want someone to hang out with.

The only reason you hire a person, is so that they make you a multiple of what you pay them.

If you want a friend, buy a dog. Don’t hire somebody.

The only reason you hire someone is to turn a profit.