Tame Chaos with an Operations Manual

Originally published
Originally published: 10/31/2018

Have you ever felt like you had very little control over your business? Maybe you feel like you own a building full of people, rather than a business with employees working toward a common goal. I know I have, so I know how you feel.

When I was a lot younger, I worked in a fast food restaurant. Looking back, I remember the importance of their operations manual. This manual told us how to do everything. It established the rules for time and attendance. It covered staffing, greeting customers, compensation, ordering product, cooking food, packaging, and so on. Since I often closed the restaurant, I remember referring to the manual for guidelines on cleaning the kitchen and dining areas. When preparing the mop bucket, the manual went so far as to indicate how much water, water temperature, and soap to use, along with mop time per square yard. Very little was left to chance. No matter who did what, the results were almost identical. There was consistency. When you have consistency, you can fine-tune the operation.

I have visited around 200 or more contracting companies in my life. I have never seen two companies that were alike. While some might share the same employment policy manual I gave them, their business operations differed greatly. What’s worse, many people within the same company had a different understanding of what is expected from them or their department. An operations manual is like a rulebook for your company. Imagine playing a football game without a written rulebook. There would be complete chaos, even though many of the players might feel like they know what the rules are. Well, that’s what many contracting companies are doing every day.

An operations manual could easily consist of 2000 pages or more. Creating one might seem like an overwhelming task. It’s not as hard as it might seem. In fact, you likely already have some of the content. In this article, I will show you how to get started with a good “Version One” operations manual. You may want to start with a large three-ring binder. Separate each section with tabs. Here is what your manual might include:

Purpose Statement

The first thing your manual needs is a purpose statement. What is your company trying to achieve? Why did you start your company? Write something down that is both meaningful and motivational.

Core Values

What are the values of your company? What are the minimum moral requirements of your business? These questions should be considered when writing your core values. You should have between three and five core values. Core values should reflect what is important to the owner(s) of the company. They should be deeply personal.

Employment Policy Manual

You likely already have this essential part. This is a good place to start. This manual lays out all of the basic rules such as drug testing, start time, dress code, smoking policy, rules of conduct, sexual harassment, workplace safety, shift hours, employee benefits, reprimands, termination, and so forth.

List of Divisions and Departments

Determine four to five top-level divisions. These might include Sales & Marketing, Operations, and Admin/Finance. Within each division, establish three or four departments. For example, within Operations, you might have Residential and Commercial. Within those, you might have Service, Maintenance, Replacements, Design Build, and New Construction. Within Admin/Finance lies HR, Bookkeeping, Collections, and Payroll. This information will be used to create an accountability chart and further organize your operations manual.

Accountability Chart

Most people refer to these as organization charts. Its main purpose is to indicate who is accountable for what department and what role each person plays. That’s why we always call it an accountability chart. The president sits at the top of the chart. Below the president is the CEO or general manager. Here is where your list of divisions and departments comes into play. Below the GM includes each division and department along with its respective manager and their subordinates.

The internet is full of good examples. The most important design rule is this: Each person should be in a box. No management box can have more than one name in it, but a name can appear in more than one box. Obviously, the idea is that there is only one person accountable for each management position. As your company adds staff, duplicated names are removed from boxes as your cross-trained employees become more specialized.

Job Descriptions

You will need one for each position on the accountability chart. This should be exactly two pages printed on a single sheet of paper. The document should include job title, who they report to, what type of training they need, educational requirements, the work that they will be expected to do, minimum standards of performance, and their key performance indicators, or KPIs. The KPIs are four to six key indicators of how well they are doing. For a service technician, an important KPI is their callback ratio. For collections, it is average age of accounts receivable. For a salesperson, it is sales closure rate. There are many others, but these are some examples.

Checklists for Each Job Description

Each job should have a list of essential items that need to be accomplished on a daily, weekly, and monthly basis. We have found the easiest way to approach this is by creating a checklist. Your employees will reference their checklist every day.

Tool Requirement List

Each technical person needs to have a list of required tools and equipment. You will need to spell out which items are paid for by the company and which items must be provided by the technician. We also recommend that you include your company policy on lost or broken tools.


All of your company’s forms should be included. Each form should be filled out completely so that everyone has a good example to follow. You will likely have many or all of these now, so this part should be pretty easy. Just locate your best examples, hole punch them, and add them to your binder. We recommend that you include numerous examples of invoices and sales proposals.


An operations manual is a work in progress. As your company identifies obstacles to achieving its goals, the operations manual is revisited. For example, you discover that no one seems to realize who is responsible for returning warranty parts for credit. You examine the situation and decide on a detailed process. You add that process to your operations manual and call a meeting with the interested parties. They are trained on the new process. Policies and procedures are added and or modified to fix issues that present themselves. Ongoing training is also necessary so that everyone knows what they are supposed to be doing and how.

Just like a football team following a written rulebook, there will always be infractions. There will need to be penalties handed out in an even-handed manner. The important part is that your employees will have access to an official set of policies and procedures. They will go a long way to helping you gain control of your “building full of people” and turn them into a highly productive team working toward a common objective.

For additional information on developing your HVACR operations manual, and to download a free training package replete with powerful videos, market research and documents and templates — including sample pieces for your manual — visit


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