purpose of standard operating procedures

What is the purpose of standard operating procedures?

What does a typical day look like for an innovative business owner? If you’re an entrepreneur, you don’t need us to tell you how many moving parts there are. You’re managing cash flow, hiring staff, evolving your vision, managing client relationships, finding new business — and the list goes on and on. The purpose of standard operating procedures is to streamline your internal workflows so that you’re not overwhelmed by everything you’re juggling.

But how do you go about each task efficiently and consistently? Do you pay employees randomly or under a predetermined schedule? Have you experienced operational slow down due to cogs in your workflow? Are vendors hassling you for payment but you can never seem to be able to pay on time? If you’ve experienced one or all of these problems, it’s time to start thinking about standard operating procedures.

No matter your industry, a standard operating procedure keeps your business on track. So let’s explore what SOPs entail, why you need them, and how to use them. 

What is a standard operating procedure?

Standard operating procedures explain the process for conducting every task involved in your business. Often, the purpose of standard operating procedures is to automate routine, repetitive tasks. By standardizing these processes and letting them run on autopilot, you’re able to free up time to think about more complex issues your organization is facing. Here’s what your average SOP should include: 

  • Title of task
  • Publish or update date
  • Logical sequence of steps to complete a task
  • Safety considerations
  • Approval requirements
  • Chain of command and responsibilities
  • Dependencies
  • Timelines 
  • Terminology 

But here’s the thing: pretty much every professional has a standard operating procedure — they just don’t always document it. 

Think about a makeup artist creating an au-naturel look. She knows which palette colours to use for each skin tone. She has a blending routine, processes for applying eye shadow, and knows when to use lip liner. While the makeup artist has the knowledge to complete this task, if it’s not documented and written down, it would be hard for someone else to replicate the task. If the makeup artist ever wanted to hire an assistant, writing down their makeup routine would help the assistant replicate the same task at the same quality level as the makeup artist. This is precisely what an SOP does.

Related Reading: What is a business plan?

purpose of standard operating procedures

What is the purpose of an SOP?

An SOP just makes things easier. Operations move faster at a high quality level if everyone’s on the same page and knows what they’re responsible for doing. Here are a couple more goals with SOPs: 

  • Reduce human error: When processes are documented, there’s little room for unwarranted “winging” it. In other words, less mistakes are made and agents completing tasks understand exactly what’s required of them.
  • Eases new workers into the status quo: Contractors and employees have lots to learn when joining your organization. SOPs smooth out the onboarding process significantly, keeping things organized and supporting new talent. 
  • Improve brand reputation: The way you conduct business should be uniform and consistent. Everyone you interact with — clients, vendors, employees, customers — might not notice consistency, but they’ll certainly gawk at inconsistency. The consequence? Less credibility for your business. 
  • Reduce micromanagement: Do you find yourself breathing down your staff’s necks as they work? If so, you need to take a chill pill, and SOPs fit that bill. SOPs help staff feel more autonomous, which promotes better engagement and higher performance.
  • Promote legal and physical safety: Are you worried about legal compliance requirements not being met? How about violating a contract you’ve entered into with specific parameters? SOPs help keep your business safe from legal scrutiny, though you should always consult a lawyer if you’re uncertain. 
  • Scale your business: You can’t grow without improvement, and SOPs help you improve every business process. Testing them out helps you find inefficiencies, while implementing them saves you labour hours and time. Those time savings give you the freedom to focus on scaling activities, like outreach, negotiating, and more. In addition, when repetitive, routine tasks are standardized, you can reallocate resources to scaling.
  • The show must go on: Is a manager sick today? Or perhaps you need an understudy. Do you really have time to walk a replacement throughout their entire day? You have enough on your plate. SOPs help transition alternative staff and arrangements seamlessly, saving you time and energy. 

The purpose of standard operating procedures is to address some or all of the above goals. But you might have specific SOPs for different business tasks. 

Related Reading: When should I incorporate my business?

What are the types of SOP?

SOPs generally fall into four categories, as listed below. The ideal outcome or purpose of your standard operating procedure will determine which type is best.

  • Step-by-step: These are straightforward, logically sequenced instructions describing the steps in a process. For example, you might have a step-by-step SOP to process a vendor payment.
  • Hierarchal: Perhaps you have a collection of processes that make up a larger, comprehensive business task. Does that mean you need multiple SOPs? Sometimes. But a hierarchical SOP should do the trick. Hierarchical SOPs separate a process into four sections: policy, procedure, guidelines, and documentation. One example is talent onboarding — you might need to include tips and extra considerations to fully encompass the process. 
  • Checklists: Is there a lengthy list of things that need to be done by a periodic deadline? Perhaps you have a monthly report to produce which requires data input, review, analysis and presentation. All of the little tasks to produce the report can be put into a checklist. Using a checklist is best when tasks don’t necessarily need to be completed in a certain order, but must be finished by a specific deadline.
  • Flowchart: Does your team comprise more visual thinkers? A flowchart SOP might work well for them. These are diagrams that include icons and images to depict a process from start to finish. Below is an example of an accounting cycle flow chart.
purpose of standard operating procedures

Some organizations categorize SOPs by management and technical tasks. Management entails processes for creating, updating, and sharing SOPs across an organization. Technical SOPs are the business processes themselves. 

But don’t get caught up in all the details. If you’re a small business or sole proprietor, management SOPs might be more work than they’re worth. Focus on the repeatable business tasks first. Then, as your organization grows, you can consider standardizing the managerial tasks too.

Do I need SOPs in my organization?

Can your business survive without SOPs? Maybe. But why wouldn’t you want to find time and cost savings? Implementing a change in your company is always challenging and confusing, but you’ll come out stronger and standardized. In addition, the purpose of standard operating procedures is to reduce stress on your team and you. We know entrepreneurs have a lot of pressure to deal with! Let’s alleviate some stress. Plus, as you grow, SOPs become more important in streamlining your operations. They offer you comfort and security, knowing every part of your business moves in the same direction.

Here at Creative Clan, we have SOPs for client outreach, onboarding, payroll and accounting, conflict resolution, and anything else that might warrant a consistent approach. So, everything. And we can help you do the same, just say the word!

Bottom line? SOPs give you more control and awareness over your operations. Plus, you aren’t as prone to risks like client communication mistakes or poor employee judgment. 

But maybe you’re a one-man graphic design operation. Or a two-gal screenwriting agency. In those cases, do you really need an SOP? At this stage, you can probably get away with not having SOPs. But if you ever hire someone new or expand your operations, the need for standard operating procedures will quickly increase.

In other words, SOPs become more vital when you scale. You can’t grow without changing how you do things, and SOPs help you make all the right changes. Consider implementing them if you envision growth in the future!

Related Reading: 14 Business Terms Every Entrepreneur Should Know

How do I create SOPs?

Remember, you don’t have to create SOPs all on your own. Creative Clan offers operational improvement services — we spend some time understanding your business then create and implement SOPs for you!

But if you want to try your hand at SOPs, here’s what you should do: 

  1. Think of business tasks that need SOPs: Casting calls? Payroll? Overtime and vacation requests? Buying new equipment? Monthly reporting? These are just a few ideas of processes that need SOPs.
  1. Gather information: You might need expert opinions on the best practices for your SOPs. Or, you could reach out to colleagues in your industry and staff members. Finally, the internet is rich in resources. Research ideas on how to best conduct your business tasks and merge that with your own expertise. 
  1. Write your SOPs: Document the SOP in the most accessible way possible for your business and staff. Consider using instructional steps, diagrams, or both! As a pro tip, adding in a combination of visuals, text and audio will keep your reader engaged — especially if it’s a longer SOP.
  1. Get feedback from executives, management, and staff: Host a meeting and gather feedback from anyone in your organization that could improve your SOPs. Then, revise the SOPs as needed. 
  1. Test the SOPs: The whole point of SOPs is for them to be easily executed by anyone who reads them. Hand the SOP to a relevant staff member and test the process. Any hiccups? Listen to the feedback from your team and revise accordingly. 
  1. Get a third-party perspective: So you tested your process, and everything looks good — to you. But don’t you have a little bit of bias? 

To ensure the procedure is repeatable, I recommend a third-party work with the team to analyze the procedures from a non-biased point of view.

Scott Lewis, CEO of Spartan Real Investment Group, tells Forbes
  1. Share SOPs across your business: Maybe you’ll include them as an attachment in a mass email. Or, you’ll post them on a visible bulletin board on set. Our advice? Post them online or in the cloud so everyone can access them at any time. Whatever you decide, just make sure everyone in your business operation can access your SOPs and there’s no unclear version histories.
  1. Automate: SOPs are all about efficiency, so automation has to enter the conversation. Can you use tools like Zapier to automate any administrative tasks, or notify other collaborators once they can participate? Don’t worry — AI and automation help creative industries if you allow it.
  1. Review and Revise: How will you maintain your SOPs? Consider a process for reviewing and updating your SOPs when needed. Finally, ensure everyone is notified if you update your SOPs. 

SOPs and your company

SOPs help you find operational efficiencies, streamline business activities, and scale your business faster. But the most value that SOPs offer is peace of mind. Rest easy; your business is running just fine. Knowing everyone follows the same, proven process helps you relax and actually enjoy that much-needed day off! 

Still need help with your SOPs? We get it — every business has a lot of tasks to manage and keep track of. Don’t sweat it — book a consultation, and we’ll help you craft them!

Read More: Accounting for Startups: A Complete Guide

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