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Why You Need Standard Operating Procedures In Your Business

Why You Need Standard Operating Procedures In Your Business

  • 14 July, 2020
  • Arna Van Ravestein

It is estimated that 20% of all businesses fail in their first year of operation. By the 5th year, that number jumps to 50%. There are many factors that go into running a successful business, but one that entrepreneurs must take note of is the importance of proper planning and execution of ideas. In other words, having standard operating procedures is a must. In this article, we will discuss the importance of having a SOP, it’s benefits, and how to create one.

What is an SOP?

Standard Operating Procedures (or SOP) can be defined as “established or prescribed methods to be followed routinely for the performance of designated operations or in designated situations.”  These step-by step instructions are created by an organization to help employees carry out company duties and procedures in a uniform manner.

Importance of Having Standard Operating Procedures

Having a well-planned SOP is essential for your business success. Here are a few of the top benefits: 

Clear, concise duties and responsibilities. The SOP will identify assigned roles and duties of each job description, as well as expectation. This will allow each person to focus exclusively on their assigned tasks, which can prevent any overlap or multiple people doing the same job unnecessarily.

Maintain quality standards. By following the same guidelines and procedures, productivity can remain high without a reduction in quality or service.

Reduced training costs. A detailed, step by step SOP is an excellent reference tool for new hires. This will ensure everyone learns the exact same procedures and knows what the company expects. This written document could also decrease the amount of time (and manpower) needed to train new hires.

Increase company lifespan. The loss of a key employee can be devastating to a company if there is no SOP on file. By writing down the SOP, a company increases the probability of continued growth and productivity as seasoned employees and managers leave the company via resignation or retirement.  

Less need for micromanagers. By giving the staff assigned roles, managers can spend less time watching staff and more time on other duties. A checklist could be used to determine employee productivity or efficiency instead.

Standard Operating Procedure Uses

The SOP can be used in all aspects of a business model. Common areas to use the SOP including the following:

  •         Responding to customer feedback/complaints
  •         Conducting weekly sales meetings
  •         Pricing
  •         Specific job descriptions
  •         New hire interviews
  •         Employee exit interview 
  •         New hire training
  •         Advertising and promotion
  •         Social media procedures
  •         Email marketing
  •         Accounting procedures
  •         Monthly/quarterly sales meetings
  •         International sales and marketing

Creating Standard Operating Procedures

Each company will have their own SOP. It’s important to create a SOP that is tailored to that organization’s specific needs. When creating a SOP, a few questions that should be asked include the following:

  •         What is the goal of the company?
  •         What tasks need to be accomplished?
  •         Who will be assigned the various duties?
  •         What are the most efficient ways to perform tasks and duties?
  •         How much time is to be allocated for various tasks?
  •         How will employees be judged or graded?

Once created, the SOP should be reviewed periodically to ensure it is up to date, or to make minor tweaks and adjustments as the business continues to grow.

The Power of Templates

Once key questions are asked, the SOP can be created with templates. The template can be customized where sections can be added (or deleted) as needed. An excellent template that can be used is this Sales & Marketing Standard Operating Procedure Manual (SOP).  This detailed manual (SOP) can be customised for any business and used to guide sales, marketing and administrative staff on how to perform both general & detailed practices in practically any business.

This template is ideal for those who want to create a SOP but don’t have the time or aren’t sure what information they need.

Conclusion

Having a detailed Standard Operation procedure on file is critical for both new and established businesses. Having efficient systems in place could be the difference between success or failure. Create a SOP today. Your business will thank you. 

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