The operating procedures in a business plan help employees carry out an organization's daily operations. Essentially, it is a step-by-step instructional guide detailing how workers should complete any complex activities related to the business. It also helps keep companies stay in compliance with the regulations within their industry.

Standard Operating Procedures For a Business

A standard operating procedure (SOP) details the daily procedures for an entity. The Environmental Protection Agency (EPA) recommends that SOPs should always be written in an easy, step-by-step manner. Additionally, SOPs should be supported with flowcharts to clarify the relationship between departments and activities or interdepartmental relationships.

There are many potential components outlined in an SOP, such as:

  • Legal expenses.
  • Property tax assessments.
  • Directives for the management of accounting documentation.
  • Confidentiality agreements.
  • Bank account reconciliations.
  • Policies for wire transfers and credit cards.
  • How to handle travel and entertainment expenses.

Information regarding financial directives can also constitute as a component of an SOP. This may entail information regarding the directives for the board of directors or stockholder meetings and the company's financial reporting. Additionally, specifics regarding the release of any financial documents related to analysis, reporting, and forecasting may be included.

Sometimes information regarding computer and information technology (IT) may be outlined in the SOP. This would detail company policies regarding the following:

Human resource information is often part of an SOP. This includes guidelines for the following areas:

  • Background checks.
  • Outlining job descriptions.
  • Policies for job applications processes.
  • Describing the employee benefits and compensation policies.
  • Employee health insurance directives.
  • Retirement benefits.
  • Payroll policies.

With regards to the operations section, the basic rule is to simply cover the major areas and provide the most relevant details. This would include areas such as materials, equipment, labor, facilities, and processes. These are all components that are critical to the operations of a business and may offer a competitive advantage. Last, measures for maintaining security and safety may be detailed in an SOP. Generally, this would include emergency plans, ethic statements, and employee code of conduct manuals.

Writing the Operations Section of Your Business Plan

There are some steps to consider when writing the operations section of your business plan. First, remember that service and retail firms have very different operation requirements from manufacturers. Therefore, you will want to devote a considerable amount of time to outlining staffing and describing employment contracts for key service providers such as marketing experts, buyers, and designers.

Do not go into too much detail in your operations section. It is important to stick to the processes that are the most significant to the business, such as those that provide a significant advantage over your competitors or those that are essential to your production. Be sure to estimate the need for the materials required and adequately describe any agreements with suppliers. In your SOP, make a list of every potential piece of equipment you may need, including a description of its function, features, and cost.

Business Plan Procedure

The procedures of a business plan describe how to:

  • Prioritize short and long-term goals.
  • Manage the organization's growth.
  • Develop successful objectives and strategies.

The strategy team is responsible for developing the organization's business plan. A well thought out business plan helps employees understand how their daily responsibilities and tasks relate to the overall goals of the company strategy.

How to Write Business Standard Operating Procedures

The purpose of a standard operating procedure is to identify the tasks that will require detailed instructions in order to run the business smoothly. A well-written SOP should describe the activity and any necessary tasks involved acting in accordance with industry regulations, provincial laws, or even just the standards for running the business. Be descriptive when explaining how to complete the task. For example, in a clothing retailer operation, the instructions may be:

  • Verify all locks on the premises.
  • Hang or fold all disorganized clothes.
  • Make sure the floor is free from any debris.

Remember, it's important to identify the scope for each role in the organization. Also, make sure that the information that is supplied to each employee is relevant to their overall role in the business. All managers should:

  • Clearly understand the standard operating procedures.
  • Make sure standard operating procedures are followed.
  • Understand the significance of the standard operating procedures.

The standard operating procedures should be regularly reviewed at the business level to ensure that all updates in the operations are properly accounted for.

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