Standard operating procedures (SOPs) are sequential instructions that act as a benchmark to guide the work process that employees follow. SOPs enable companies to operate their day-to-day operations in a way that’s consistent and predictable. There’s benefits of implementing SOPs for all types of businesses, however ones that require strict adherence to standardized procedures and rules will benefit the most.
SOPs are not typically implemented for businesses that thrive on creativity, however that’s not to say that these companies don’t have certain, repeatable processes that could gain stability by implementing SOPs.
Now let’s take a look at the reasons why SOPs are critical to businesses, especially e-commerce ventures...
SOPs can either be written in a step-by-step format or presented in the form of a flow chart. Regardless of the format, SOPs are clearly written and designed based on the input workers doing the job provide.
An example of a flowchart-style SOP
It’s advantageous for companies to create standard operating procedures for jobs that need to be completed by different employees. Failure to adhere to standard procedures could mean employees wasting resources and time because they have to repeat certain steps or fix mistakes. SOPs makes sure that tasks are executed in the same manner each time, which saves your business time and money.
Having standardized procedures makes managers’ lives much easier. Why, you may ask? The process of monitoring employee performance is one of the built-in advantages of adhering to SOPs. Workers who follow SOPs are aware of the tasks they need to accomplish, and can plan to meet the targets efficiently. And, if all employees in the same role follow the same steps, it’s pretty easy to see which ones shine and which ones struggle.
This makes it easy for managers to measure employee performance against set standards and goals, and reward high performing ones, while giving more guidance or training to employees that perform poorly.
Standard operating procedures that are articulated clearly help employees to understand their responsibilities. This improves communication by eliminating guesswork, and reduces incidents where poor communication leaves employees trying to figure out how to accomplish certain tasks.
SOPs also ensure that workers are accountable by showing them clearly what is expected of them, as well as letting them know that their work is being measured.
Workers with clear communication channels and the knowledge of what is expected of them are more productive and are more likely to perform at their highest level. Standard operating procedures increase employee productivity by reducing confusion and clearly stipulating the things that are expected of them.
Experienced employees often act as trainers because of the vast knowledge they have accumulated over the years. However, if they leave the company their experience and knowledge can be potentially lost forever. Here’s where SOPs can save the day! By creating SOPs based on the experience of these employees, you ensure that this knowledge is retained within the company.
Standard operating procedures improve safety by making sure that employees perform every task as stated. For example, in a manufacturing environment, a SOP won’t leave any room for employees to divert from the safest method of doing something. Moreover, SOPs help reduce the legal liability of your business if an accident does occur.
Now that you have a good understanding of how SOPs can benefit every business, let’s look specifically at how eCommerce companies can reap the rewards of implementing SOPs.
For e-commerce companies, SOPs can help deal with workflow challenges, improve conversion rates, and foster customer relationships better. Furthermore, SOPs can more effectively integrate 3rd party systems, which improve employee performance and have a direct impact on your bottom line. Let’s dive into more details of how SOPs can benefit eCommerce companies.
Well-designed SOPs clearly stipulate how operations should be performed for your online business, leading to efficiency and consistency. This ensures that your online store delivers the same experience, quality, and results to customers all the time.
One such example is packaging. If your products are packaged the same way, every time, your customers will not only appreciate the professionalism, but this leaves less room for human error, such as accidentally missing an item in a box.
SOPs encourage your employees to manage their responsibilities properly, and perform their daily tasks consistently.
Time is valuable for all businesses; it translates directly to money. For e-commerce businesses, time is even more valuable because most operations are automated and time-dependent with profit margins that can often be very slim. Efficiency is key.
Common tasks in e-commerce such as quality assurance can be time-consuming without SOPs. For instance, online stores often need to check the quality of products before shipping them. Implementing SOPs that clearly define the steps involved and automating them can increase productivity and profitability for your e-commerce venture, because you don’t have to rely solely on your employees’ memories.
SOPs can not only help grow your e-commerce business, but they also make it easy to execute complex projects. This improves customer experience in your online store, leading to longer-lasting relationships with clients.
Standard operating procedures can be used for everything, especially simplifying communications, logistics, customer relations, and even billing systems for your online store. Their implementation provides a similar experience for customers every time they stop at your store. Your customers will definitely appreciate this and come back for a repeated positive experience.
SOPs encourage teamwork and provide steps and rules on collaboration. This can be useful in marketing campaigns. For instance, SOPs can state the approach that will be used in marketing campaigns and how different departments will collaborate to achieve specific goals. Perhaps your marketing department is wanting to build an Instagram following. By using a proven SOP, you can accomplish this quicker and more effectively than if you tried to “wing it” (for lack of a better term).
For another example, a Search Engine Optimization expert may have to work alongside a web designer or developer. They’ll work together to improve the SEO of your site. This involves things like improving the quality of content in your online store by inserting appropriate links, updating content to include specific keywords, and performing technical on-site SEO analysis. This collaboration process can only progress smoothly if your business has a clearly-defined SOP that stipulates the tasks and responsibilities of each member.
If you happen to be in the Amazon selling business, by implementing an existing SOP regarding the recommended usage of Amazon Sponsored Products Ads, you can get a jump start on your competition and squeeze the most profitability out of Amazon’s powerful ad platform.
The online business environment is super competitive because of the ease with which information flows, as well as the low risk involved in entering this space. Most of the time, don’t even need a physical office or inventory to launch your startup. Consumers are often bombarded with advertisements from different companies offering similar or competing products and services.
By implementing standard operating procedures, your company can deliver higher quality products and services and stay ahead of your competition. These SOPs should ideally have clear step-by-step instructions, as well as contain business processes that are proven to be effective.
You can get started with SOPs right away. Although there’s numerous software tools out there to help you create and manage your SOPs, using something as simple as a document editor like Microsoft Word or Google Docs will suffice. Then, you could either share the documents electronically with your staff, or print them out and distribute in binders.
It should be the employee with the most knowledge on the process being documented. Perhaps this isn’t a single person, and you’ll need to get multiple people involved.
There’s various opinions out there regarding the basic SOP structure, however most of them contain:
By now you probably realize that SOPs are not merely basic instruction guides for employees. In fact, they are crucial strategic documents that play a significant role in the success of any business, be it online or in the brick and mortar world.
If you’re not already implementing SOPs in your business, you should seriously consider it.