What Are Standard Operating Procedures?

by Renee O'Farrell ; Updated September 26, 2017

Developing standard operation procedures is the hallmark of any good business. Doing so creates a type of consistency that is invaluable when dealing with customers and maintaining good records. Understanding what procedures should be standardized is a characteristic of a good manager.

Standardizing Procedures

Companies develop operating procedures to explain how tasks should be accomplished. In order to determine which tasks should be standardized, spend one week writing down every action taken to fulfill the needs of daily business. Certain issues, such as a customer who was dissatisfied with a product/service, will generally be handled only by management, and, when considering a newer and smaller business, by the owner himself. The operating procedures standardized initially should be those that an employee will be responsible for performing independently; other, more managerial procedures can be added later.

Features

The procedures themselves should explicitly explain the action, from start to finish. This means that even the most simplistic act (such as turning on the computer) should be listed. The idea behind a procedure is that the employee should be able to follow the procedure step-by-step and, making no assumptions, complete the task accurately and meet the standard of performance required. Even though listing more rudimentary actions may seem redundant, or a waste of time, doing so has its own reasons.

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Functions

The standardizing of operating procedures acts as a benefit to both the employee and the manager/owner. The manager/owner is able to save time and energy explaining procedures. The employee receives the benefits of having clear expectations; employees are happiest when what is required of them and how they are expected to accomplish their daily tasks are written in black and white. Even simplistic instructions can be somewhat calming when the employee is in a situation in which a task must be accomplished accurately, but quickly (example: a long line of customers).

Benefits

The primary benefit of standardizing operating procedures in found in the greater consistency it brings to the internal and external functions of the business. Once operational procedures are standardized, and, of course, followed, several benefits emerge. Firstly, customer perception will be of a well-run, professional company, thus increasing brand image. This perception may even carry over to potential investors/loan officers in that a copy of the company’s procedures is usually requested when financing/investment is considered. A copy of a company’s procedures is also frequently required in order to obtain insurance. Secondly, accounts will be spot on, an area in which consistency is not only desired, but also, in many cases, required by law.

Considerations

Standardizing operational procedures is not something to be taken lightly; specificity is key. The procedures standardized will form a foundation by which employees are trained, promoted and disciplined, and through which customer needs are handled, transactions processed and books maintained. Spend the extra time to accurately standardize the procedures required for good company operations.

About the Author

Renee O'Farrell is a freelance writer providing valuable tips and advice for people looking for ways to save money, as well as information on how to create, re-purpose and reinvent everyday items. Her articles offer money-saving tips and valuable insight on typically confusing topics. O'Farrell is a member of the National Press Club and holds advanced degrees in business, financial management, psychology and sociology.

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