The Top 5 Reasons You Need an Operations Manual
How well does your business run without you? Does everything fall apart when you’re not there? Do you feel like a master juggler trying to keep all the balls in the air? If these questions strike a nerve, then maybe you’re missing an essential tool: an operations manual.
Many fitness business owners will tell you that they have an operations manual, but when they show it to you, it’s just an employee handbook that contains policies regarding sexual harassment and vacation time. This is important to have, but it doesn’t constitute an operations manual. A legitimate operations manual contains everything that happens in your business and how it happens. It centralizes and contains your facility’s mission, its organizational structure, how you hire, how you train, your workflow processes, marketing systems, sales systems—and, of course, a section on policies.
This article introduces a 4-part series that goes into depth about what owners and managers need to know when creating an operations manual. Now that we’ve defined what it is, let’s review the top five reasons you need one.
1. It Provides a Framework
You need an operations manual so you can stop “flying by the seat of your pants.” If employees come to you with urgent questions and you’re always making decisions on the fly, that’s a strong indication you need an operations manual. The best businesses are able to spend time on important things like strategic planning, but if you’re always rushing to manage urgent situations, you’ll never have time to build your business.
2. It Houses Best Practices
Not planning is the same as planning to fail, so create your best systems for doing business, document them, and revise as needed. In his book The Lean Startup, Eric Ries writes about the “Build-Measure-Learn feedback loop.” The lesson is to measure every system that’s built into your business, and learn from the feedback you receive. Of course, the operations manual is subject to change! Systems improve due to trial and error, so you’ll have opportunities to improve the manual.
Remember that hope alone is not a plan. You can’t simply hope that you hired right, that you provided adequate training, that the marketing works and you have good sales systems in place. Instead, you have to plan for these things and write down the procedures.
3. It’s a Financially Fit Strategy
Would you like to make more money? Good, because the third reason you need an operations manual is to reduce costs and make more money. You might still be thinking that you don’t need to write things down. “It’s common sense, and if people can’t use common sense then I’ll hire someone else,” you say? That’s a mistake.
In the book Scaling Up, Verne Harnish writes, “Even smart people (doctors) need checklists. In one hospital, a checklist prevented 43 infections and eight deaths, while saving $2 million in costs.” There are many checklists in a standard operations manual, and there’s a serious amount of cost savings associated with these checklists. Business owners will tell you that the biggest preventable expense is employee turnover. Hiring the right people is one of the most efficient ways to prevent turnover, yet most fitness managers and owners don’t have a hiring checklist like the “12 Steps to a Good Hire” in Dave Ramsey’s book EntreLeadership.
Taking time to develop a hiring system, writing that system down and keeping it in your operations manual is just one way to cut costs and help you make money. Having such information on hand keeps employees who make $50 or more per hour (such as yourself) from doing $10-an-hour jobs. Look at it this way: Surgeons specialize in surgery, and janitors sweep the floor. Sure, if surgeons sweep the floor they get points for demonstrating that appreciate every job. However, who does the surgery while the surgeons are sweeping the floor? As the owner/manager, you are the surgeon, and you have work to do that no one else can do. Your duties generally can’t be written down and taught to others, so prioritize your responsibilities while letting others do their jobs, all of which should be clearly outlined in the “workflow processes” section of your operations manual.
4. It Creates More Freedom
Did you think that starting a business would give you more time to do the things you enjoy? It still can, but you need to organize your business to create more freedom.
As you grow, you realize that you can’t do it all. You need to be able to take a vacation without worrying that your business will fall apart while you’re gone. For that matter, you need to be able to just go home for the evening without getting a phone call from a frantic employee who doesn’t know how to handle a situation!
Say, for example, that you’re finally home after a 14-hour day, and an employee calls you. “Mrs. Jones wants a copy of her payments and attendance, but I don’t know how to do that.” This is the type of scenario an operations manual cleanly addresses, so that you can relax. If you get such a call, all you have to say is “Turn to page 34 . . .” and the call is completed. Better yet would be that your employees know the manual well enough to look there before they call you.
5. It Provides Consistency
Change is hard, and many people don’t like it. You need an operations manual to provide your employees with instructions that will enable them to provide customers with consistent, excellent service: an experience worth revisiting. In The E-Myth Revisited, Michael Gerber describes a customer who stopped taking his business to a local barbershop. The customer received exceptional service the first time he visited, but each subsequent visit was unpredictable. None of the visits would have been seemed bad if assessed individually, but when they were put together, Gerber writes, “There was absolutely no consistency to the experience.” Customers crave consistency. The McDonald’s business plan proves this. McDonald’s doesn’t make the best burger, but the chain makes a consistent meal and delivers it in a consistent way, which has led to years of success.
Of course, there are many more benefits to having an operations manual. For example, someday you may want to sell your business. Without a manual, all of the crucial knowledge for success is locked inside your brain, which is not fully accessible to an interested buyer in the short term or the long term. On the other hand, if you have a centralized, documented system for business success, a potential buyer is going to be very motivated to strike a deal.
What’s your goal? Is it to stop flying by the seat of your pants? Do you want to find time to work on what’s important rather than what’s urgent? How does it sound to have more time and money, while offering your clients a consistent experience? All this and more is possible when you take the time to create an operations manual.
In the next installment of this series, we’ll focus on workflow processes.