You need more than a business plan to operate a successful business
By Otis D. Jones
For the St. Louis American
What is an operations manual, you might ask? It is best described by comparison to a more familiar document, the business plan.
The biggest difference between a business plan and an operations manual can be found within the names themselves. Business “plan” says that this document maps out the plan in which to proceed with a business. The business “plan” is the forethought, the proposed strategy, the idea, or the intent that starts a business venture. The business PLAN answers questions such as these:
How is the company organized (e.g., LLC, C-Corp.)?
What’s the business opportunity that the company wants to capitalize on?
What are the market trends?
Who are the competitors and what are their strengths and weaknesses?
What’s the company’s product or service mix?
Who makes up the company personnel and what are their areas of expertise?
How will the company protect its proprietary information and products?
Financially, what does the company look like now, and what are the projections for 12 months and three years?
These and many more planning questions get answered in a business plan. Although the business plan is a necessary document, it is definitely not the only document a business needs.
The operations manual tells you what you and everyone else involved with your business should be doing on a daily, weekly, monthly, quarterly and yearly basis. If you look up the word “operations” in a thesaurus, it equates to the term “war zone.” The operations manual is the place where the action occurs, the point of contact or interaction that each employee has with customers, suppliers, co-workers, supervisors, tasks, company culture, etc. The operations manual answers critical questions such as:
What should the first person in the office do each morning to prepare for the day’s business?
What are the daily, weekly, quarterly, and yearly tasks of each employee?
What are the specific skill sets needed for each employee position?
How will we use those skill sets to recruit, hire, train and evaluate each employee?
How should you greet customers, whether it’s on the phone or face-to-face?
How should daily problems get resolved?
What exactly should you say to an angry customer; and how can you win that customer over again?
What are the quality requirements that a company should expect from its suppliers?
Who determines the quality requirements for the company and how can the company understand and consistently meet those requirements?
What is the most efficient and effective way to produce a company’s products or services?
How do you determine the best ways to spend a company’s money?
How are you going to increase sales if your marketing/advertising plan mentioned in your business plan isn’t working?
What should the last person leaving the office do to shut down the business?
A business plan can not give an owner the answers to these questions; only an operations manual can. When a company owner finally gets these operations-related questions answered, the owner now has a co-leader to the company. There is a document that shows each employee how to do his or her job. No more asking the owner for help. No more asking the owner to remind an employee about how to do a task. The owner no longer has to put out as many fires.
Another impressive phenomenon occurs. The owner’s time starts to free up. The owner can now start acting like a real owner of a company and not just some all-knowing, all-working, fire-extinguishing employee. The owner can finally take a break. Furthermore, as the operations manual gets more refined and more employees get hired, the owner’s breaks get longer and more frequent, all while revenues keep coming in. Doesn’t that sound nice?
Dr. Otis D. Jones is a Master Black Belt in Six Sigma and is a certified ISO 9001 Auditor. He has worked with Fortune 500 companies and small companies in both service and manufacturing industries. He can be reached at joneso@hiseconsulting.com.
