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Operational Manual and Its Importance

The operational manual is a piece of documentation that serves as a guidebook for how a business functions. It displays the standard procedures on how to run the business, produce goods, and provide services. It demonstrates an effective way of communicating policies and shows employees how to do their jobs properly.

An operations manual should not be confused with an employee handbook, which is a much smaller document addressing conditions of employment, corporate culture, and acceptable behavior policies. The operation manual provides a business standard to all of its employees. It is also effective when training new employees as it has specific guidelines.

Typically the office manager, project manager, or operations manager is the person assigned to write the operational manual. The writer must be able to present the processes in a manner that allows someone unfamiliar with the business to perform the task.

The operational manual is a company-wide document that needs input from all departments. It is typically divided into sections that coincide with different contents and organized by departments of the company. The project manager should create a list of general how-to questions. Then, whichever employee is currently responsible for a given task should record how to do it. The project manager or writer can formalize it.

Operational manuals vary depending on the business, but in a food & beverage industry they may include:

1. Job Descriptions. A job description is a formal explanation of an employee’s role in a business. It may include the duties, responsibilities, and working conditions of a job. It should also include the job title and name of the person assigned to the job. Job descriptions provide employees with an understanding of their roles within the business.

2. Standard Operating Procedure (SOP). A standard operating procedure is a written procedure that shows step-by-step guidelines to obtain efficiency in a business. An individual may be liable if they do not follow the standard operating procedure.

3. Vendors. Keeping a list of all of the vendors associated with your business helps when you need to place your orders. A company’s inventory should be made according to this list of vendors together with their phone numbers, email address, and contact persons. It should also show the day you need to order the products by and what day to expect the delivery or the amount of days of shipping.

4. Products and Services. The operational manual should state all of the products the business sells and the services they provide, which should all be clear to the customers.

5. Emergency Procedures. Emergency procedures state a clear plan of action in case of an emergency.

6. Marketing. Marketing includes discussing the logos, colors, style, and calendar of activities that are repetitive.

7. Inventory. A business should have a list of all the items they have on hand, which shows the cost for each item as well as its quantity. When you know your inventory, you can count the cost of goods sold (COGS). Beginning inventory is the inventory you have at the beginning of the month or at the start of your business. Ending Inventory should be done at the end of the month, and it will become your beginning inventory for the following month.

                     COGS = beginning inventory + purchases - ending inventory

An inventory may be complex but it helps to know when to buy the products, what amount to purchase, and the price fluctuation from time to time. It also shows if/when items are missing or stolen. Without an inventory, a business lacks control of their production. The lack of this process can result in a lot of inefficiencies and in losing profits for the company.

8. Shift Management. Without shift management, a business may suffer a loss in total revenue. Having too many employees on the floor can negatively affect the revenue of the business if there aren’t enough sales.

Establishing an hourly sales analysis provides a business with information on what hours to schedule employees and when to shut down operations for the day. Having all employees’ availability and vacation dates on a sheet helps prevent scheduling inconvenience.

Shift management is another example of a process that needs to be carefully implemented in the operational manual. It is important information a manager can use to complete the task efficiently and avoid under or over staffing a shift.

Why don't you give it a try... put together an operational manual! Once you have finished it, have an employee follow the steps for a particular activity. Testing will help you ascertain the accuracy and clarity of the manual before you finalize it. If done in the right way, the operational manual gives you a peace of mind. Your employees will know what is expected and how to keep your business running smoothly without your presence.