What is a standard operating procedure? I already know this will be a series of articles. However, broadly speaking, a standard operating procedure (SOP) is the documented processes in an organization. In some form, every business has these. The companies that succeed generally have a better SOP.
Why does this matter?
Growth. If you ever want to grow your business, you need a strong framework. This is true if you’re adding employees or locations. Additionally, an SOP is a wonderful tool for institutional knowledge.
Selling. An organized company sells for more than a disorganized company. If you ever plan on selling yours, you should have a standard operating procedure in place so that the new owner can picture themselves jumping in immediately.
Institutional Knowledge. Anytime an employee leaves your company, they leave with some information about how to do their job. Ideally, they’d put all that information in an SOP before they leave. That way, there’s less time spent by supervisors (or likely you) training the new employee in that position.
Quality Product. If you want to deliver a quality product every time, a standard operating procedure is the way to do that. In some cases, it’s not necessary. For example, if your business is collecting change from a fountain, there’s really only one way to do that and you’re likely going to get wet. However, if you do discover a better way of completing your job’s tasks, write it down so it’s easier to repeat in the future!
How to start a standard operating procedure.
To start an SOP, it’s all about thinking, planning, and writing.
First, start think of each of the tasks that gets repeated in your business. No matter how small, if it’s repeated, it’s worth documenting.
Second, Create a list of those things you thought of in step 1. Once you have the list, arrange them in an order that makes sense. Some things belong in different departments or different functions in your business. For example, marketing should have its own category separate from the paid functions.
Third, write it all down! At first, it is going to be sloppy, and that’s fine. Just get it all down on paper so you can go back and edit it. The clients I’ve helped through this process have all found ways to become more efficient in this part of the process. Taking your time here is worth a ton of money to you. If you’re like most business owners, this is the first time you’ve ever looked at your processes in this way.
Protecting your IP
If done well, a standard operating procedure is actually worth a lot of money. Who wouldn’t want a game plan for how to run a successful business? A lot of people do because that’s one of the benefits of a franchise. No more reinventing the wheel!
Because their function is to be read, you probably need some protections in place to make sure your employees don’t start their own business with your SOP. How do you do that? There are two main ways.
First, firewalls are important. I’m not talking about on your computer, but those are important too. In this case, you should only be sharing the parts of the SOP that apply to a particular employee’s role in the company. No one but you, your executive board (if any), and your business’s professionals like lawyers should have access to the whole SOP. I personally have a master SOP and then copy & paste the parts of the SOP needed for different roles. I have one for business attorneys, sales, receptionist, legal administrative, and social media marketing. When I update the master SOP, I update any of the others that are affected by the changes.
Second, when applicable, it is a good idea to use nondisclosure agreements (NDAs) to prevent the unauthorized disclosure of your SOP and its contents. In order to keep them valid and fair, the NDAs should be as narrow as possible while still covering your trade secrets.