Small business promotion with retail speaker Tom Shay
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Doing It By The Book

Creating instructions to operate your business

For our SBA today, we visited with a small business owner who stated they learned some of the most valuable lessons for their business during the first decade they were in business. The business owner first found the most important event in a business was a bi-weekly staff meeting. As these meetings were held, the owner found their initial meetings were complaint meetings; usually management complaining about how employees were failing to follow directions.

After several months, the staff meetings took a surprising turn for the better. They found there was an increasingly longer part of each meeting spent towards training, and less time spent discussing and solving problems.

The business owner developed staff meetings to the level where they had an agenda typed and in the hands of each attendee.  The agenda covered product knowledge, problem solving, and advertising. Over time they found they had slowly but surely created an employee manual. They had defined job descriptions, job specifications (how to do each job), a set of policies for the staff, a set of store operating procedures, and even a collection of class room lessons for each of their staff meetings.

The owner stated they went from having staff meetings to having educational classes. They had written tests which were graded and reviewed with each employee. The manual they had created had become the one tool needed to make the business run smoother and more profitably.  When the senior member of this family owned business retired, the remaining owner found there was still another manual to be written, The need for the second manual, the owner's guide, came from several experiences.

The first was our desire to involve other employees in the operation of the business.  This can also read as, "I will want a vacation and I do not want the work waiting for me when I get back." Another is a belief in an old adage that explains, "management means you are not doing the same chore over and over."  This material also comes in useful if you lose a valuable employee and there is a need to prepare someone new for the job.

Another reason for the owner's manual came simply from the owner’s struggling to remember all of the details to any office procedure.  Whether it be daily register audits, monthly accounts receivable statements, or end of the month bookkeeping, the owner wanted instructions in detail.

Somehow, anytime they would perform one of these tasks, there would be interruptions or perhaps they had not cleared their mind to concentrate on their work.  They often found as they neared completion of the task, they had forgotten an important step and had to spend extra time redoing the task.

Finally, there was also the logic that if there was to be a first manual to instruct the employees in regards to how they performed their tasks, then there should also be a manual for the office manager and for themselves.

There were lots of reasons which all made sense to the owner. And so they began to work on the second manual. Detailed notes were kept as to how to perform the bi-weekly chore of payroll. They listed how to calculate hours, commissions, monthly bonuses, and payroll deductions for personal charge accounts.

Included in the owner's manual were photo copies of payroll reports showing how to read what information was necessary to create the bank deposit for payroll taxes. There was a set of details for posting and paying accounts payable and accounts receivable. The owner created a chart listing checks that were due on a regular basis: rent, bank note, payroll taxes, workman's compensation insurance and others.

One of the sections in the manual listed all of the vendors and their phone numbers - a quick and easy reference guide to their offices and sales representative.  The list also told the necessary instruction for getting inventory reports from the computer.

Other sections of the second manual included general ledger account numbers, audit sheet instructions, copies of the cashiers' handbook, cash flow charts, bonus sales calculations, the variable pricing policy used by buyers and warehouse staff, and the multi-level pricing system which was used to give quantity discounts. Sales history figures were also kept for quick reference.  As the employees of this business had a bonus program, sales goal information was always very important.

When it came to creating the end of the month sales reports, the set of instructions was several pages long. It told the office manager what figures to gather: checking and savings account balances, accounts receivable and payable balances, and what reports to print. 

The owner's manual for this business had fifteen sections. The owner did not sit down one day, or week, and create it. The owner knew the manual was never completed.  There was always something they could improve on.

The manual was acknowledging a reality to the owner; having all of this information and knowledge in only one or two person's head was flirting with disaster.  Having the manual gave a tremendous peace of mind.  New tasks could then be undertaken, knowing they had backup documentation for all their work.

When you create your owner's manual, realize it will never be a best seller.  And you surely will not label it as a book that "you just cannot put down".  But in its' own way, it is the book of the month - every month.

Tom Shay is a fourth generation small business owner providing proven management and business building ideas through his Profits Plus Seminars, Profits Plus Solutions coaching, books authored, and articles written. Tom can be reached at 727-464-2182 or through his web site:

Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179