Standard operating procedures (SOPs) are written instructions that outline and standardize procedures within your company. SOPs are used in every industry in order to keep business practices in accordance with legal, financial, and industry regulations.
In more common language, SOPs are how-to’s that cover every aspect of your business. For example, a manufacturing company will have step-by-step manuals for running its machines. Businesses have customer service guides that outline how to deal with customer complaints. Tech companies have troubleshooting guides for when their systems don’t work. An SOP can be anything from a detailed written manual with diagrams to a simple picture that shows where a specific item goes in a warehouse.
Why Your Company Needs SOPs
SOPs are essential to any company, whether you’re a small startup with a handful of employees or a giant corporation with many branches and departments. Here are the reasons SOPs are so important:
Maintaining Quality Standards.
SOPs ensure that every employee is on the same page when it comes to production, marketing and sales, and customer service. This ensures a consistent standard of quality throughout your company. Tasks can be easily delegated to any employee.
When problems arise in your business’s daily operation, SOPs provide you a roadmap for troubleshooting. Manuals describe how to diagnose and solve problems so that any employee can do it.
When you have clearly spelled out procedures, this prevents your employees or yourself from making emotional or rash decisions. Problems and conflicts can be solved fairly with no guesswork.
Reduced Learning Curve and Errors.
SOPs allow you to train new employees easily. There’s less of a learning curve for them. As they learn about your business, they’ll make fewer errors. They can then settle into your company more quickly.
A Safe, Healthy Environment.
Since your SOPs put you in compliance with all safety and health regulations, they ensure a healthier, safer workplace. They also protect your company legally in cases of liability.
SOPs keep you in accordance with regulations and laws. They’re easy to update when laws change. If there is a sudden inspection of your company, everything will be in order. Clients and customers may also investigate your company, and if you can show them this documentation, it helps to engender trust.
Your SOPs make managing finances, handling bookkeeping, and filing taxes much easier.
Finally, SOPs make your company more dynamic. It’s easy to change company procedures and regulations when they’re all well documented and easily accessible to your employees.
More Value for Your Company
All of the above benefits offer a further benefit for your company – they make your company more profitable by making it more efficient. This in turn adds value to your company which is passed on to clients and customers. This added value helps if you choose to sell the company in the future, and it helps you secure funding when you need it. Financial lenders nearly always look at SOPs when considering a company for a loan.
SOPs Can’t Cover Everything
SOPs differ from one business to another even within the same industry. However, your standard operating procedures can’t cover everything completely (although they should strive to). Because of this, make sure everyone in your company has a good understanding of company vision, mission, and values so that they can make the right decision when one needs to be made.