10 Reasons Why Your Small Business Needs Standard Operating Procedures (SOPs)

When most people hear about standard operating procedures, or SOPs, they often think about a large corporation with hundreds of employees and pages and pages of documented processes. Rarely does one hear the words small business and SOP in the same sentence and we think that is a BIG business mistake!

Regardless of the size of a business, establishing SOPs can make life simpler for everyone involved – the entrepreneur, staff, business partners, and ultimately the customers.

What Is a Standard Operating Procedure – or SOP?

An SOP is essentially a step-by-step guide for handling routine tasks and recurring events in business. Along with the sequence of performing an activity, SOPs also usually include a timeline for completing each step. Some examples of where you might use an SOP in your business include:

• New Customer/Client Onboarding SOP: Steps you take as a business to add a new customer
• Customer service SOP: Steps to handle common customer requests and complaints
• Blog Management SOP: Instructions on how to post on your website, standard components of a post, frequency and time of posting, steps to promote new blog posts via social media etc.

As a small business, following standardized operating procedures can save you time, allow you (and your team) to be more productive, eliminate a lot of errors, and improve compliance with industry guidelines. Here are ten reasons why every small business should have SOP.

10 Reasons Every Small Business Should Be Using Standard Operating Procedures

1. Better Manage Your Team

SOPs are a highly effective tool for managing your team. Here’s how you can use them.

Train New Employees Faster
For new employees, providing SOPs allows them a start point to learn about the business. It helps them understand the frequency of each process, what is entailed in completing, and the responsibilities of each person in the business. This allows them to get up to speed much faster and relieves you, or another team member, from having to spend countless hours training.

Improve Employee Productivity
After the initial training, SOPs act as a guide for staff to ensure that they perform tasks correctly and within specified timeframes. The more they follow the SOP, the more confident employees become in their skills. Improved employee productivity means you save on work hours, and at the same time reduce chances of errors in performance.

Prepares the Business for Delegating/Outsourcing
Once you are confident that a standard operating procedure is working well, you can delegate the work to a newer recruit, or outsource to a virtual assistant. This frees you up to work on higher level tasks to build the business.

Useful in Writing Job Descriptions
It can be difficult to evaluate the contribution of employees in a small business. SOPs form the basis for listing critical business processes as well as daily tasks and assigning responsibilities for each.  Therefore, they become the baseline document for drafting job descriptions of each member of your team.

2. Maintain and Improve Quality

Ensure Product Quality
How do you deliver the same product quality consistently? One way is to have quality checks at different phrases in your process. The other is to ensure that everyone understands the specifications of the final product. Manufacturers, as well as service organizations, can use standard operating procedures to communicate effectively with their staff on how they want things done to meet desired product quality standards.

Create a Benchmark of Service
While your customers may never catch a glimpse of your internal SOPs, they will certainly know how professionally you run the business. Having ‘Service’ SOPs ensures that each member of your team has a clear understanding of the expected outcome of service interactions. This could include the way a customer is spoken to on the phone, the resolution to a customer problem, or the time it takes to complete a customer order.

Ensure Business Continuity
To ensure continuity of business, it’s essential to identify a backup staff for each task. In the absence of the key staff member, someone else can refer to the SOP, quickly get up to speed and ensure that the work is completed correctly.

Identify Areas for Improvement
Over time, SOPs becomes a source for identifying opportunities for improving your internal processes, which could save additional time and money and further improve customer experience. Ideally, you should review critical SOPs at least once every three or four months to assess if you need to make changes.

3. Reduce Business Risk

Improve Compliance
If you are in a business that is highly regulated (e.g., food business, medical billing, financial advisory), you need to ensure that you continually follow the laws and regulations at every step. Documenting these requirements in your SOP serves as an important reminder for both you and your staff on steps crucial for compliance.

Reduce Risk of Accidents
Compared to many businesses, restaurants and bakeries, and manufacturers are relatively more accident-prone places of work. As the employer, it is your responsibility to ensure a safe working environment and SOPs can help you achieve that. As an example, at a restaurant, you can create SOPs for cleaning the work area, handling and maintaining dangerous kitchen equipment, and expected handling of any accidents.

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Instead of being overwhelmed by the notion of creating a massive SOP manual for every single process in your business, start small. We suggest you start by noting down the steps you take the next time you perform a work task. It doesn’t have to be an elaborate form or follow any special formatting – it’s just a recording of each of the steps that need to take place to complete the process successfully.

Alternatively, you could make a video-based SOP for sharing information with your employees or contractors on the tasks that you handle and want to delegate to others. From the video, they can take over the process and write out the steps as well, so you have an official written SOP and the video.

At VirTasktic, we are BIG believers in the power of standard operating procedures for every business. Don’t get intimidated by the process, though. Just pick one task (heck – it could be how you order supplies!) and get started. You’ll be glad you did!