Have you ever wondered why your small business seems trapped in a perpetual loop of inefficiencies, errors, and communication breakdowns?
Perhaps you’re struggling to consistently deliver quality service, experiencing a high staff turnover due to confusion and frustration.
Hi! AJ here! Over the last decade, I have scaled and (recently) sold my business for multiple seven figures.
I built Small Business Bonfire (SBB) to help other entrepreneurs like you create and maintain successful businesses.
As a business owner, I am here to tell you that the answer (or part of the answer) lies in having well-thought-out standard operating procedures (SOPs.)
So buckle up as we dive into the world of SOPs, and explore how they can be a game-changer for your small business operations!
Key Takeaways
- An SOP is a set of instructions describing how to complete an activity to produce consistent results.
- Standard operating procedures help small businesses become more organized, efficient, and productive.
- Effective standard operating procedures lead to improved quality of service, reduced staff turnover, and fewer errors.
- Companies of any size can benefit from having SOPs in place.
What are SOPs (Standard Operating Procedures)?
Standard operating procedures provide a step-by-step direction for performing specific business operations tasks.
SOPs are written to cover every procedural aspect of running a business – from customer onboarding and sales process to day-to-day operations.
At the same time, SOPs should also be flexible to account for different scenarios that may arise during business operations.
Think of a standard operating procedure as a document that standardizes and streamlines how things get done.
SOPs can come in the form of:
- Checklists
- How to Guides
- Hierarchical Steps
- Flowcharts
What are the Benefits of SOPs?
Standard operating procedures provide many benefits for small businesses that cannot be overlooked.
Let’s look at some of the top benefits of standard operating procedures.
SOPs Help Save Money
By streamlining business processes, SOPs help save time and resources.
When employees have a clear structure for completing tasks, it reduces the need for training and supervision.
This helps free up costs that may otherwise have been spent on acquiring new talent or improving existing skill sets.
Standard operating procedures also help save costs by:
- Minimizing human errors
- Avoiding rework
- Seizing every opportunity that comes your way
SOPs Help Save (and Focus) Employee Time
Employees with established procedures for completing tasks don’t need to rely on their judgment or experience.
This helps free up time and boost productivity and morale in the workplace.
On top of that, SOPs also help employees stay focused on the company’s goals.
With well-defined procedures to follow, employees can quickly identify what needs to be done and refocus their efforts toward achieving the shared objectives.
SOPs Produce Reliable Results
Sure, the occasional mistakes are inevitable when it comes to running a business.
However, having documented SOPs in place means that employees can consistently produce reliable results with minimal effort or oversight.
This helps ensure quality service and increases customer satisfaction – an integral element for any successful small business.
No matter who completes the task, the results will be consistent and correspond to the company’s standards.
SOPs Help Maintain Consistency Across Your Organization
Consistency is the backbone of any business operation, and standard operating procedures are the key to maintaining this across all levels of your organization.
They offer an indisputable roadmap for all employees to follow, endorsing a unified approach to tasks and processes.
This uniformity ensures:
- A consistent, high-quality customer experience
- Streamlined internal processes
- Clear communication within the team
- A cohesive brand image and reputation
By embracing SOPs, your company can effectively uphold its standards and values, thereby shaping a reliable and trustworthy brand.
SOPs Improve Quality Assurance
Quality assurance is the cornerstone of any successful business.
What is quality assurance? It’s a process that routinely evaluates the quality of products, services, and operations.
SOPs are an important part of this process as they allow teams to easily track activities and ensure that each task is completed accurately and in a timely manner.
SOPs Improve Organizational Safety
Organizational safety is a top priority for any small business.
SOPs are crucial for promoting workplace safety:
- Ensuring awareness of proper procedures for handling hazardous substances
- Providing protocols for operating dangerous machinery
- Guiding interactions with visitors
Employees may be at risk of injury or worse without well-defined standard operating procedures.
SOPs Improve Output Consistency
Every business has its own unique set of tasks that must be completed in a particular order.
SOPs help create a systematic approach to task execution, guaranteeing that all employees complete tasks with consistent precision and quality.
For example, when following a standard operating procedure for customer onboarding, your team can guarantee that customers receive the same level of service every time.
Or, if you’re in the manufacturing business, SOPs can help ensure that all products are assembled with quality and consistency.
SOPs Standardize Customer Service
Customer service is critical to any business, and SOPs are essential in standardization.
By standardizing the customer service process, SOPs ensure:
- New customer service inquiries are addressed in a timely and efficient manner
- The same level of excellence is maintained in every interaction
- Customer satisfaction rates are consistently high, fostering loyalty and repeat business
Better customer service leads to improved customer retention and an increase in revenues.
SOPs Improve Organizational Efficiency
Efficiency is essential when it comes to running a successful business.
Standard operating procedures help optimize existing processes and procedures so that employees can complete their tasks in the most efficient way possible.
It also helps reduce operational costs, as resources are optimized to get the job done right – the first time around.
SOPs Increase Employee Training Effectiveness
New hires can often take a long time to be trained on their job duties.
SOPs help improve employee training by providing easy-to-follow guidelines for completing tasks, allowing new employees to get up to speed with the organization’s processes quickly.
By implementing standardized training procedures, businesses can ensure all employees understand how to complete their jobs correctly and efficiently.
This is a HUGE way we use SOPs at SBB. We have a detailed step-by-step guide on HOW to do a certain task.
When we bring someone on, we hand them the SOP, and 95% of the time, it’s the same output as someone who’s been doing it for years. Magic?! I think not.
SOPs Help Employees Transfer Work Easily
It’s not uncommon for employees to move on from their roles within an organization.
But, without SOPs in place, the transition can be much more challenging than needed.
With SOPs, new hires can quickly and easily pick up where previous employees left off – ensuring that no step or process is missed and that quality remains consistently high.
SOPs Hold Employees to a Standard
Standard operating procedures are a practical tool for holding employees to a standard.
They provide a direct and clear expectation of what is required in their roles, enhancing their performance and reducing discrepancies.
SOPs contribute to:
- Ensuring a consistent level of work performance
- Providing a benchmark for evaluations
- Encouraging accountability and responsibility among staff
With SOPs in place, staff members know exactly what is expected of them, leading to increased productivity and better overall efficiency.
SOPs Help Your Organization Reach Legal Requirements
Standard operating procedures are essential for ensuring the organization meets legal requirements for businesses in specific industries.
It is essential to comply with all applicable laws and regulations to avoid hefty fines or other penalties.
Having documented SOPs in place can help your business effectively demonstrate compliance with the relevant regulations while keeping track of essential data.
SOPs Increase Employee Productivity
Productivity is a fundamental component of any thriving business, and SOPs are pivotal in bolstering employee productivity.
They help in:
- Eliminating confusion by providing clear instructions for every task
- Standardizing processes, thus reducing the time spent on decision-making
- Enhancing time management by streamlining work processes
With the aid of SOPs, employees can focus more on their core responsibilities and less on trying to figure out the ‘how’ of tasks, leading to a significant increase in overall productivity.
SOPs Increase Problem-Solving
SOPs provide guidance for dealing with problems and difficult situations.
This helps employees understand how to respond in different scenarios, enabling them to make better decisions and arrive at the most suitable solution faster.
Having a pre-defined problem-solving process in place can help in the following ways:
- Maximize efficiency
- Minimize downtime
- Reduce costs significantly
SOPs Cut Onboarding Time
New hires always take time to get up to speed with their tasks and acclimate to the work environment.
Standard operating procedures can reduce this onboarding time significantly, providing clear instructions and guidance for performing various tasks.
Also, with SOPs in place, it’s much easier for a new hire to understand the organization’s culture and how things are done in your business.
SOP Outline: What's Included in a SOP?
Before you start creating SOPs for your business, it’s essential to understand what should and shouldn’t be included in them.
I have a list of some of the most important elements of an effective standard operating procedure. Let’s take a look!
Title Page
The title page of the SOP should include a summary of the document, which comprises:
- The document title
- Its purpose
- Its scope
- Its date of publication
- Version
Department
This page should include the name of the department for which the SOP has been created.
Department Head
The name of the department head – or the person responsible for overseeing this SOP – should also be included.
Employee Responsible for SOP
The name of the employee responsible for implementing and maintaining this SOP should be noted.
This individual should also be in charge of making any necessary updates to the SOP.
Date of Last Update
The date of the last update is important, as this helps keep track of any modifications made to the SOP.
No one wants to be using an outdated document!
Purpose
The purpose of the SOP should be clearly outlined in this section.
This document should include:
- A description of what it is used for
- An explanation of why it is essential for the organization
Expectations
In this section, the expected outcomes of the SOP should be outlined.
This could include the necessary tasks that need to be completed to achieve the desired results.
It may also involve a list of resources needed and any additional information or guidelines related to the task.
How to Guide
The ‘How to Guide’ section forms the crux of the SOP, providing step-by-step instructions on how to complete the task.
This includes:
- A clear, sequential list of steps necessary to complete the task
- Any safety measures or precautions needed to be taken
- Description of the final outcome after completing the task
- Guidelines or tips for successfully executing the task
- Any potential issues or roadblocks one might face during the task and how to resolve them
This section should be written with utmost clarity, ensuring anyone who reads it can readily execute the task, even without prior knowledge or experience.
Bonus: Images and Video
Step-by-step instructions are great, but most employees will still have questions.
Including video and pictures/images in your SOPs will definitely take longer, but it’s well worth the effort.
When they say, “a picture is worth a thousand words,” I say, “a video in a SOP will save you a TON of headache training.”
Action Step: For each complex tax include a video in your SOPs. I use Loom for online tutorials and my iPhone for in-the-field video work.
How to Write a SOP
Writing standard operating procedures can be daunting, especially if you’re starting from scratch.
I’ve got you covered! Here are some steps to help you get started on the right foot.
Step 1: Use a Great SOP Template
The SOP writing process can be much smoother if you have an excellent standard operating procedure template at your disposal.
A template makes it easy to get a jumpstart on the SOP writing process. It should include all the relevant sections that we talked about above.
There are also different standard operating procedure software available that can help you easily create SOPs if that interests you.
Step 2: Write Organizational Goals for SOPs
Before you start writing down the actual content of the SOP, it’s a good idea to set clear organizational goals for them.
This should include:
- Establishing measurable objectives for each SOP
- Setting deadlines and timelines for their completion
- Assigning responsibility to an individual or a team within the organization
Step 3: Outline Your SOP
This involves listing all the points you want to include in the SOP.
For each point, outline why it is important and how it helps the organization achieve its goals.
Step 4: Gather All the Information
Now that you’ve outlined your SOP, it’s time to gather all the information related to the task.
This could include:
- Images or illustrations of equipment used in the process
- Documents and other references needed for the completion of the task
- Links to any additional resources required to execute the task correctly
- Contact information of the individuals in charge of each step
Step 5: Outline the SOP
Now that you have all the necessary information, it’s time to assemble your SOP.
This involves breaking down each step into individual tasks and listing them in a logical and easy-to-follow order.
Remember what’s included in a SOP? Here is the list:
- Title Page
- Department
- Department Head
- Employee Responsible for SOP
- Date of Last Update
- Purpose
- Expectations
- How to Guide
Step 6: Test SOPs With Employees
Implementing standard operating procedures is only half the battle. You need to make sure that your SOPs are effective and valuable for your employees.
To do this, it’s a good idea to have your employees test out the SOPs and provide feedback on their effectiveness.
You should also test the SOP yourself to make sure everything is working as intended.
This will help you identify any problems or gaps in the standard operating procedures, allowing you to make any necessary changes.
Step 7: Revise & Update SOPs Regularly
Once you’ve tested the standard operating procedures and made any necessary adjustments, you should revise and update them regularly.
This helps keep your SOPs up-to-date and ensures they remain relevant in an ever-changing business environment.
It also allows for improvements to be made as needed, ensuring that the standard operating procedures stay effective and beneficial for the organization.
Standard Operating Procedure Examples
If you’re still feeling overwhelmed at the thought of writing standard operating procedures, let’s look at some real-world examples.
This can help give you a better idea of what an SOP should look like and how to structure yours for maximum effectiveness.
Example 1: Onboarding Employee
This example outlines the process for onboarding new employees into an organization.
It includes steps such as:
- Creating an employee file
- Setting up their workspace
- Introducing them to their team
- Having them complete the necessary paperwork
- Scheduling a training session
- Sending out a welcome email
Example 2: Accounts Payable
This example outlines the process for handling accounts payable.
It includes steps such as:
- Verify invoices
- Request payments
- Reconcile accounts with the bank
- Update the accounts payable ledger
- Prepare financial reports
- Follow up with vendors as needed
Example 3: Social Media Best Practices
This example outlines the best practices for using social media for business purposes.
It includes steps such as:
- Create a content calendar
- Schedule posts
- Respond to customer inquiries on social media
- Monitor feedback and reviews
- Track engagement metrics
- Adjust content strategy as needed
Remember, your first SOP might be a high-level overview of each of these steps, but as your business grows, you might have SOPs for each bullet point above.
SOP Benefits Closing Thoughts
Standard operating procedures are an essential part of running any successful business.
They help streamline operations, improve efficiency, reduce errors, facilitate better communication, and ensure everyone on your team is on the same page.
With the right SOPs in place, you can make sure that no task falls through the cracks and that your team is consistently executing at its best!
Don’t wait any longer – start writing your standard operating procedures today and give your business the boost it needs!
Let us know if we missed anything in the comments below. Happy SOP writing! 🙂