Standard Operating Procedures - What, Why, Where and When?

What are SOPs?

Standard Operating Procedures (S.O.P’s) are the foundation of good business.

It does not matter how big your company is or how small, you can benefit from having S.O.P’s. This is true even when you are a one-person business.

There are processes in every part of your business.

Take a large manufacturer where the process of creating products requires large machines that do everything. Each machine will have a manual (or manuals) that describe the steps to run the machine in infinite detail.

The SOP is the official guide used by a business to ensure that each step of their operation is done right.

I once saw a book of SOPs used by a golf course that included a script to be used to greet a new golfer, another you would use to organize them and get them to the tee box to begin their game. Others went right down to the colour that each piece of mowing equipment had to be.

They are the roadmaps covering every aspect of your business.

Why Have Documented Standard Operating Procedures?

You can be a self-employed tradesperson or a “fortune 500” company with thousands of employees. It does not matter. Your business needs them.

Here are a few important reasons to consider.

Quality Control

The facts are that when S.O.P’s are in place in your business, quality control standards are far more consistent, flowing through from production to customer service and everything in between.

Problem Solving

Every business owner runs into problems from time to time. Standard Proceduress give you troubleshooting guides on how to handle issues that arise. This allows these solutions to be handled by almost any employee.

As a self-employed small business perspective, they take the emotion out of any issue and allow you to quickly diagnose and resolve the issue.

Eliminate the Guesswork

When trying to make decisions, the worst thing you can do is to make them under duress.

SOP’s take the guesswork out of problem solving by having procedures that are specifically created and clearly described.

Training New Employees

Training new hires or retraining current employees requires time and money to implement.

Standard Procedures help to streamline these steps and ensures that every new employee receives the same training.

Government and Safety

The workplace must be a safe place to work. Having established processes set to Government Standards not only gives you safety, but also compliance to rules and regulations. In addition, the SOP protects against any legalities that may raise their heads.

Where to Use Them

Standard Operating Procedures can be applied everywhere in your business. The thought that they are only for manufacturing processes is simply not true.

Consider this. One important place to have a S.O.P is in the process of sending invoices and collecting monies owed to your business. Having a system for this process will help ensure that you are not burdened by outstanding accounts receivable that put a strain on your cash flow.

Or consider having a system on handling complaining customers. This would ensure that each complaint would go through an established series of communications to resolve the complaint.

When Do You Apply the S.O.P?

You should create one for any process you do more than once in your business.

There should be no hesitation in creating one. It is a live document and can be changed easily when necessary. But until it is changed, it is the system to be followed. It makes no sense to have to re-create the wheel every time you want to take some action in your business.

The sooner you create it, the better.

Standard Systems Make Your Business More Valuable

They can help in the beginning of your business, while you are in full swing and even at the end of your business life.

SOPs help create a vibrant active and valuable business and provide confidence to investors if ever you decide to sell your company or require a loan.

As Michael Gerber, author of the E-Myth says: “The system is the solution”. Your systems are made up of your standard operating procedures.

Read more in the Business Fulfilment section of the Self Employed Business Manifesto.