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Adding Value with S.O.P
The existence of a Standard Operating Procedures manual (S.O.P) brings about many benefits for an organisation. The advantages of a system in place for any organisation cannot be denied. When the system is put in writing and when it is continuously monitored, it reaps more benefits. This is exactly what an S.O.P facilitates. Initially, the system is decided upon and then it is put in writing in a simple step by-step model.
Your productivity improves, and as a small business owner, you need to be highly productive to succeed.
5 Key benefits of an S.O.P manual:
1.Reduced learning curve and training time for new employees
When someone is new on the job, your well-written and researched S.O.P can be a lifeline to them to be able to know how things work. For instance, you can ask your new employee to make all the arrangements for you to organise and attend a workshop in another city. By referring to the S.O.P, your new employee will know exactly which travel agency you use with their contact details, which type of car to hire/service to use and how many quotes to get regarding the venue.
2. Business continuity
When a key staff member is on leave or not in the office for some reason, work does not have to stand still. By referring to the S.O.P someone else can take over the urgent tasks and do them correctly the first time.
3. Standardised processes
The S.O.P makes it easy to find out what policies and procedures are in place to handle repetitive situations/tasks.
4. Delegating tasks
A good S.O.P will include an organisation chart of the business, as well as have a short job description and contact details for each staff member. If you need to delegate a certain task, you can see at a glance who will be able to help you or advise you. You can stop micromanaging, as it is clear who is responsible for what.
5. Ensuring your clients are getting the best possible experience
Because there is a standard way of dealing with client queries, refunds, promotions and follow-up etc, you can make sure that each client is treated fairly and equally, enhancing their interactions with you. You thus provide the best possible client service.
It’s a common statement among small business owner/operators that they simply do not have the time to allocate and commit to writing and preparing such documents. There are however specialised companies that can provide these services at sensible fees.
For those business owners potentially looking to sell their business now or in the future, the question may be asked – “what added value will this document provide when I decide to sell my business”?
Key benefits of a S.O.P relating to the sale of a business:
Banks, Lending Institutions, Accountants, Business Advisors, and Consultants will all add credibility to a company that has incorporated such manuals into their business model. This is vital when decisions are being made on the viability of an acquisition of a business.
2. Transferability of intellectual property
Many businesses are bought and sold with a large portion of the business owners “know how” exiting the business along with them. In order for a new owner to reduce the risk of failure and provide continuity of service, having procedures documented can add huge value to the business.
3. Minimising the vendors assistance period
Simple but true – if a vast majority of the IP information on the day to day running of the business is in written format which is transferred to the new owner there can be a requirement for a reduced vendor assistance period required from settlement.
All of the above ultimately results in an increase in value for business owners of organisations with a good solid SOP manual in place. It provides prospective purchasers the confidence of future success and maintainable earnings.
An S.O.P manual is a vital and valuable asset of any business, and in a time when we are starting to see an increase in business owners looking to exit and retire, it will be vital that a business can stand out from a crowd and provide a point of difference from other similar businesses on the market.
Article written by Steven Matthews - LINK Bay of Plenty & Waikato