McDonalds and Subway Have This. Do You?

By , Money Strategist for Business Owners

Solo-E Certified Solo Entrepreneur Expert

Justin Krane, CFP - Money Strategist for Business Owners

According to the U.S. Dept of Commerce, 95% of franchises are still in business after 5 years.  According to the Bureau of Labor Statistics and the SBA, only 50% of small businesses survive within 5 years.

So why do franchises succeed?  One reason is that they follow an operations manual the franchisor created for them.

An operations manual is a written plan for how to run your business. It should be written so a complete stranger could walk into your company and take over the duties of any job you’ve hired employees to do.

That means you need systems and processes for handling simple to detailed tasks. Michael Gerber, the author of “e-Myth Revisited” writes about having amazing killer systems that any employee can follow. The systems need to be written down, with step-by-step instructions.

If you’re an entrepreneur, think about why you got into business for yourself. You wanted freedom and autonomy. You wanted to do things your way, create value, and get paid well for it. So why not write all of this stuff down!

Here’s Why You Need an Operations Manual

1) High quality and less room for error.  Having these systems in writing will keep the quality of your product/service consistently high.  The key is the consistency, because the steps are documented in the manual. This will also eliminate the amount of mistakes that your employees could make.

2) Better use of your time. Ever feel like you want to work from home rather than going into the office because there are fewer interruptions? Say goodbye to your employees interrupting you every 20 minutes with questions. Tell them the answers are in the manual. If it isn’t then put it in there! That’s what I do. Now that you have systems that are written down and documented, you should have more time to focus on sales, marketing, and any other strategic initiatives you want to do. That’s where the real growth occurs. Seriously.

3) Your business could be more attractive to a buyer.  Maybe you’ll get a higher price for your company because you have written policies and procedures. Buyers love that kind of stuff. They want to buy a well-oiled machine.

An operations manual should include 2 main things.  First, put in all of the company information that you would want any new or existing employee to know. Some examples include: product/service offerings, vendor contact info, username/passwords, and emergency contact info.  Second, the operations manual should have every system and procedure for each type of employee to follow. An example of a procedure is a checklist that your employee should follow when using your company’s CRM database software.

Your manual needs to be alive – no more fungus and mold on top of that manual! It has a heartbeat. Always update your manual. There is never too much info that you cant add to it. I’m challenging you to create yours or if you have one to update it. My gut says within 1 year the odds could go up that you will be making more money if you create one, update it, and use it. Lets go!

Justin Krane is a money strategist for business owners. His mission is to help business owners understand the money side of their business. He teaches entrepreneurs how to be strategic with their business money so that they can grow their businesses.

Justin isn’t about cutting back and living a frugal life. Justin is all about getting the shoes, doing sushi, and living the best life today – while saving for the future.

He has been featured in CBS, Fox Business News, and MSNBC. Book a Free Strategy Session with Justin.

© Copyright 2012 Justin Krane, CFP

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