March 1st, 2010
Most small businesses do not have an operations manual. Part of the reason is that they are small enough and people and departments communicate often enough to have a basic understanding of what everyone is doing.
About a year ago we worked with a three person consulting firm. That firm’s owner recently asked me why they weren’t using their operations manual more often and was it something they were doing wrong? Interesting and excellent question!
The short answer is…that’s ok! The reason is that much of the work went into the preparation of the manual: interviews, whiteboarding, planning, contingency planning, program development, etc. Once the building systems phase was complete they began implementing what they built.
The reason they don’t refer to it often is simply because each member knows their role in the new initiatives. Plus, helpful tools built from that phase, such as checklists, have become part of the day-to-day operations. The operations manual will definitely come back into play when things change or one of the employees leaves (permanently or temporarily) and someone needs to take their place. Since all employees main functions are documented, it will be simple for the new person to walk right into that role. This is where an operations manual really pays off for a small business.
As an example, I have a company of only two people: myself and a fabulous Project Manager. For our small company we have a 70 page operations manual. This may seem excessive however, if my Project Manager won the lottery and decided that she didn’t want to work anymore, I would need someone to quickly step into her role to serve our clients. If VisionBridge can’t adequately serve our clients we risk losing our valued relationships with them, and that’s not a risk I’m willing to take. What about you?
Tags: checklists, operations manual, small business
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July 8th, 2009
A friend and colleague of mine, Matthew Griffith, recently blogged about systems so I definitely wanted to mention it here! A copy is below, but if you’d like to go directly to his blog, click here.
Matt’s post:
Businesses fail. Most businesses fail, because they run out of momentum. You’ll hear that described in various ways, like:
- High debt service.
- Shift in markets.
- Poor cash flow.
- Insurmountable rise in costs.
- Inflation.
- Recession.
- Insufficient capital or “under-capitalization.”
- And so on.
Those are just sad excuses for a business to fail. In the end, every business failure is the result of the owners and managers failing to identify and plan for future opportunities and threats. I am not a big fan of SWOT analysis (Strengths, Weaknesses, Opportunities, Threats), because it usually does not translate into action. SWOT sessions make management feel good that they involved the whole “team,” but concrete action steps are not often listed, assigned to personnel and followed up later.
Done well, SWOT can benefit a business. It’s just not done well often enough.
Another approach is more akin to Kaizen theory, which is generally defined as incremental but continuous improvement.rks well, if a business has t
SYSTEMS! That is the key to operating a business well. A system enables a business to all these things as a part of what the business itself does:
- Deliver the same quality good or service each time to every customer.
- Identify quickly the cause of any problem resulting in lower quality.
- Identify new customer needs and wants, which is often a signal for a new market opportunity.
- Identify trends suggesting that your current offering of goods or services is becoming obsolete.
- Reduce inefficiencies.
- Reduce risks and losses.
- Grow market share by effectively communicating with customers and future customers.
- Identify new vendors, alternative sources of materials, labor-saving equipment/services, and strategic partnerships.
- And so much more.
I’ve watched dozens upon dozens of businesses fail over the years. In the final analysis, each one failed because each lacked systems. None were fully committed to systematic business operations. The owners and managers thought too much about making widgets and not enough about building a business enterprise.
So, what is your business doing? Are you building widgets? Are you simply creating or maintaining jobs for the owners or managers?
Or are you fully committed to building a business? Are you developing the systems needed to build your business enterprise?
Tags: business plan, cash flow, operations manual, small business, systems
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