NARI: Standard Operating Procedures

authors Dan Taddei, MS Ed. BCA | April 18, 2019

Consistency is the hallmark of great remodeling companies. Getting that consistency does not just happen; it takes planning, practice and documentation. Part of that documentation takes the form of standard operating procedures (SOPs).

SOPs set the standard for how your company gets things done and empowers employees to complete tasks with little to no training. Having SOPs in place will allow you to fill unexpected staff losses that otherwise could be very costly to your business.

What Are SOPs?

SOPs are step-by-step instructions on how to accomplish a specific task or function. They should be used to document any process that must always be completed the same way and ensure consistency when several staff members complete the same task. They can be as simple as the process to open your office in the morning or as complex as the process you use to set kitchen cabinets. No task or function is too simple or complex to warrant an SOP. The need to have the task completed consistently day in and out by your staff is the criteria.

Why You Need SOPs

Do you really need more “paper”? You know what needs to be done, when to do it and how to get it done. So why should you document those things when you can just get them done?

Consider that you have a key employee who does tasks such as payment collections and deposits, billing, payment of invoices, screening leads and setting sales appointments. Then, without warning, they just don’t show up for work. How do you continue operations in the same consistent way as before? And once you have a replacement hired, how do you teach all of those processes to the new person? SOPs can make this transition much smoother. If you are lucky, this scenario has never happened to you—but it has happened to most of you.

Every business can benefit from the use of SOPs. Additionally, consider preparing your business for sale if perhaps you would like to retire. By establishing SOPs for all aspects of your business, you’re providing a solid framework for the new owners. Granted, they may change a few, but the foundation is set for them.

How Are SOPs Constructed?

You can Google search standard operating procedures and find many examples of SOP formats. The procedures need to be simple and easy to follow, use common language and be free from abbreviations. Several short, simple procedures are better than one long complex one. The SOPs should be grouped by functional or departmental areas  such as financial, production, sales, office or administration, and any other areas your business may need.

The key to SOPs is to discuss the process with those on your staff who do the job, and keep them involved in the development. Watch them do the task and document each step. Be sure to ask a lot of questions. Once you have seen and documented the process, ask your staff to do it and make sure you got it right.

How Many SOPs Should I Have?

The simple answer to this question is: as many as it takes. This really is true, and only you can be the judge of that. You need to look at the operations of your company from the outside and consider which procedures are needed to adequately prepare for the loss of any staff member, including yourself.  In most cases, this is the first step in developing SOPs. Having this understanding can give clarity to which procedures are needed and then help prioritize their development.

What Is the Basic Structure of an SOP?

The basic structure of an SOP would be something like the following outline:

  • Title, department/staff responsible to conduct the SOP, and an index number (e.g., prod101).
  • When the SOP is done, whether it’s daily, weekly, as needed, or there can be a triggering event.
  • The purpose of the procedure. This should be one or two paragraphs maximum that provides the “why” of the procedure.
  • Then the procedure itself. Be sure to number the steps. If the process includes making selections on a machine or screen, insert pictures and diagrams to help the person handling the procedure make the correct selection,. If one procedure refers to another, clearly indicate the name of the procedure and location, if necessary. Clearly indicate what to expect at the end when completed correctly.

SOPs should be reviewed at least yearly and even more often if you make changes to your business. For example, if you change your accounting software or update the design or estimating programs, those changes trigger a review of the affected SOPs. To that end, you should have an SOP that defines how often your SOPs should be reviewed and details what events trigger such a review. It should also allow your staff who use the SOPs regularly to recommend changes to improve their effectiveness.

SOPs can help you weather the absence or loss of key individuals in your company. They can help your employees operate the company while you are on vacation or at a NARI conference. QR

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