Why You Need a Management ManualJan 17, 2023
When you invest in a franchise you receive detailed step-by-step guidelines to duplicate the proven brand systems. These are contained in an operations manual, which you must follow to know how to operate the business.
Having this document is a great benefit for the new franchisee because then they can sell a desirable product or service and reproduce the brand, image, and marketing efforts the same way the franchisor does. This brings customers and revenue to their business.
But this is only half of the process in the franchise industry. And, although it is great to have a brand that brings revenue, revenue is not profit.
- In order to have success in the long term, you also need to implement business systems, documented in a management manual.
Today’s blog will review what should be in that management manual and the benefits of investing time and effort in this key task.
Who should write down the management manual?
Bad news the franchisor doesn’t provide this set of procedures you need. Why does your franchise investment doesn’t include this information? There are two main reasons
- If the franchise owner were to hand you a management manual, they would be giving you a business degree in franchise management. Therefore, they will have to charge you a lot more money!
- If they were to provide you with those other systems, legally you would be considered a joint employee in the United States.
That’s why it is up to you as a franchisee to design the business systems you’ll have, write them down in a manual, and train your team on them so they can manage the franchise unit as you want.
What management systems should you document?
They are categorized into three types:
- The systems to hire and retain great people
- The systems to increase sales year over year
- The systems to control waste and maximize your profitability
As you can see, these systems are extremely important for your business! That’s why you should write them down in a management manual so your people and yourself have a tool to train your existing and future leaders, so there are no inconsistencies in the operations.
These procedures must be as accurate, complete, and proven as the ones provided by the brand. And you need to have them in place so your unit managers and assistant managers can follow them and successfully and consistently produce positive results in your business.
Let’s go over them one by one.
How to hire and retain people
You need to provide your leaders with very clear guidelines on how to manage the employee lifecycle. That includes many activities you must define, such as:
- How to hire top talented people
- What’s the right onboarding process
- How should the staff be trained
- When to give raises
- What KPIs should be evaluated
- How and when to recognize a team member
- What disciplinary processes are acceptable
- How to terminate the employment relationship in case anything comes up.
You must document all of these business processes and train your managers on them so they can execute these on your behalf, in a consistent way and exactly the way you want them to.
How to increase sales year over year
The second set of processes and procedures that should go in your management manual are the ones that will increase your sales year over year. The franchisor will indeed provide some sort of marketing, either with regional or national scope, depending on how much marketing fee you pay.
But it will be up to you to have strategies and systems for your managers and your team to not only capture sales but increase them year over year. This is something you have to define, document, and train them on so that they are can execute them day in and day out.
Another process you have to document is the custody of cash so the money is protected and gets to the bank. Some activities around this are:
- Establish how and when to do a deposit
- Who takes it to the bank and how
- In case you have a pickup system, how the cash is prepared
- How the register must be managed
- How it balances out properly
Again, all of these procedures have to be defined, documented in a management manual, trained, coached, and followed up upon.
How to control waste and increase profits
You have to remember that we're in business to make money and therefore, our managers require the skill and ability to control the waste so you can maximize profitability.
The two major expenses in your business are labor cost and product cost. Having a set of processes and procedures will ensure you have the lowest cost of labor but the best possible service, and the least amount of product cost while still providing great products and services to your customers.
Among the things you have to define are:
- How to make a schedule and do a follow-up on it
- How to make sure that people are respecting the policies and procedures
- How to do inventory
- How to place an order
Whether you are a franchisee or an independent business owner, you have to document your business management systems. Hence, your unit managers and leaders will know how to manage your business, lead their teams, increase sales, and maximize your profits.
The only way they will be able to do that is if you teach them how to do that.
Five steps to creating your management manual
- Clearly define what those systems are and how each of them should be done.
- Document them so they can be consistently found and referenced
- Train your team so they can follow your management policies.
- Follow up to make sure that these systems are being executed.
- If you see something that is not being done right, review your management manual with the team leaders and correct the procedure.
That is the value of having a management manual. If you don’t, you can do two things:
- Schedule a call with us at our admission office at www.AdmissionCall.com to learn about a program that will help you define your business systems so you can develop your management manual.
- Join one of our quarterly Multi-Unit master classes. Register for free at www.MultiUnitMasterclass.com to obtain a good pathway to start the management manual creation process.
I hope that this was useful to you. Stay tuned for more information, don’t miss our social media (Facebook, Instagram, LinkedIn), and subscribe to our YouTube Channel to get more tools, business tips, and resources to help you be a successful business owner.
- Do you have all of your business processes defined and documented?
- Do your leaders know where to go for references on how to operate your business or do they always end up asking you?
- Are you able to delegate operations so you can have time freedom?
- What can you do to have a higher level of execution in your business?
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