Why You Need Standard Operating Procedures in Your Business
Before we discuss why you need them and what they do to help you in your business, let’s look at what a SOP or Standard Operating Procedure is.
Standard Operating Procedures are processes documented by a business to make sure that all aspects of the business run efficiently, and products and services are provided to customers consistently.
They are the road map to performance in every department and effective in big businesses right down to self-employed small business owners. In fact, in a small business, the use of SOPs can have a truly positive effect as it saves time re-inventing the wheel, so to speak.
In their purest form, they deliver the right way to perform a task within your business structure. Let’s take a closer look at some of the reasons why every business needs S.O.Ps.
Here are some of the benefits derived from having documented systems in your business.
- Consistency – Every individual has a mind of their own and given the opportunity will try to do things their way. The SOP takes unnecessary creativity out of a task and delivers consistency every time.
- Error Minimization – When you take the time to write down every step of a task and the way you want it done, you minimize the number of errors that can happen. This is so even when you are the one performing the task. Taking the time to document the process will give you a clearer view of all the steps.
- Better Communication – Communicating with employees can be drastically improved when everyone is on the same page. S.O.Ps are guidelines that provide the groundwork for employees to follow. They should be written in such a way as to eliminate confusion, so each person is communicating using the same language, so to speak.
- Improved Structure – As a self-employed small business owner you may not think that you need structure. However, if you think that, you are terribly mistaken. Documented procedures help add structure to your business and help you see your business in a different light. That light is structure. It is somewhat like building a house. As a carpenter you can build something almost without thinking. However, a “blueprint “makes it a lot easier.
- Health/Safety/Government Compliance – Every business has standards that need to be met for Health and Safety and there is no better way to make sure they are done properly than having documented systems. They are not just for business functions as they help put a value on human life by having specific Health and Safety Standards. The best way to avoid accidents in the workplace is to have tight S.O.Ps and enforce them everywhere.
- Better Cash Flow – Now you may ask “how can SOPs help with my business cash flow?” If it were my business, I would have a system for Invoicing and collecting money owed to my business. In fact, this would be one of the first I would write, as businesses large and small are all effected by cash flow. Every dollar in accounts receivable is a dollar you cannot use to pay your bills. Setting up financial procedures will really help keep cash ‘flowing’ in your business.
- A One Voice Approach – I once worked in a business where I was part of a sales force. Everyone tried to sell the product by using their own imagination. This was costing the company lots of dollars in lost revenue and costing the salespeople in commissions. Finally, there was a SOP given to us in the form of a sales presentation called a ‘read off’, for everyone to use. Someone analyzed the best bits of the good presentations and put them into a script that was read to the customer using a binder and such. It included the most challenging part which was asking for the order. Well, I can tell you that sales almost doubled, the company was happy and the salespeople as well.
What more can I say? There is no question… you need Standard Operating Procedures in your business!