SOP (standard operating procedure)
Also called: standard operating procedure · process document
A written record of how a specific task in a business is done, detailed enough that a competent person who has not done it before can do it correctly without asking.
The test of an SOP is not whether it exists. It is whether somebody new can follow it and get the right result without asking a question. Most documents that businesses call SOPs fail that test — they were written by the person who already knows how, so they leave out exactly the things that person no longer notices they know.
A working one is narrow. One task, start to finish, written in the order it happens, naming the tools and the wording actually used, and stating what a correct result looks like so the person doing it can tell whether they have got there. "Handle client enquiries" is a topic. "Respond to a first enquiry from the website contact form" is an SOP.
The reason they matter beyond tidiness is that they are the mechanism by which knowledge moves out of a person and into the business. A business where the procedures are documented can hire, delegate, take leave and be sold. A business where they are not is carrying its operating instructions in the heads of a few people, and is exposed to every one of them.
The most common failure is not writing them — it is the fact that nobody reads them. An SOP kept where the work happens, referenced in training, and corrected when it turns out to be wrong is an asset. One written during a quiet week and filed in a folder is an artefact.
What it tells you
How much of the business is written down and how much is still being carried by individuals — which is the practical measure of whether it can grow, delegate, or ever be handed over.
Read: the business that runs on one person's memory →See also
Owner dependency
The degree to which a business only functions because the owner is personally in it — holding the knowledge, the relationships, the decisions, or the work itself.
Goodwill
The part of a business's sale price that is not accounted for by its physical and identifiable assets — what a buyer pays for the earnings the business will keep producing after the sale.
Business diagnostic
A structured examination of a business — its foundation, structure, numbers and strategy — carried out before any solution is proposed, in order to find the cause of a problem rather than its symptoms.
A definition tells you what the word means. It can't tell you whether it's your problem — that takes a look at the actual business.
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