When I bought my most recent company, it had five locations in two states and absolutely no policy and procedure manual.
Shortly after buying the business, I called a management-team meeting, and I asked them how they knew what to do as they went about their daily duties. Most of them just shrugged and looked at me. They said they either used their best judgment or they would call the main office and ask for direction.
As we opened a sixth location three months after buying the business, I knew that we needed to standardize how we did business so that as we added more locations we could have all of the new hires review the policy and procedure manual rather than have to guess at what to do.
I started the manual just addressing the basics of a building-supply distribution business. How did we buy, how often and in what quantities? Who were our preferred suppliers? I also addressed shipping and receiving, stock put-aways, credits and returns, restocking fees, acceptable gross margins on special-order items, and inventory rotation. After that first version of the manual, I kept adding additional policies as things popped up.
Over the years I joked that I could explain what fiasco led to each new policy. Every employee at every branch had to read the manual and sign an acknowledgment stating that he or she had read and understood the manual.
If you don’t have a manual, my advice is to start small with just your top 10 most important policies and procedures and then add to it as new ideas come to mind. You will see how quickly it will grow and, believe it or not, your employees will thank you that they don’t have to come to you several times a day to ask how to do their job.
Jim Sobeck is a Greenville-based serial entrepreneur. He most recently was CEO of New South Construction Supply, a distributor of building products he grew from four locations to 11 locations before selling it in February 2023. He is also the author of “The Real Business 101: Lessons From the Trenches,” available on Amazon. He can be reached at jrsobeck@gmail.com.
