What is IAS 2? A guide for small manufacturers
We cover exactly what IAS 2 is, how it's calculated and why its important to be aware of this standard as a small manufacturer.
How to create SOPs for your product based business
Your Complete Guide to Creating Standard Operating Procedures for Your Product-Based Business
If there’s one thing you’ll never regret doing for your small business, whether you’re a team of 1 or 10, it’s creating standard operating procedures. Systematizing your business is truly the secret to scaling and future-proofing your business.
SOPs ensure you can bring on another team member without investing hours in training them on every task, but they’re also essential for solopreneurs. Creating SOPs allows you to make sure your processes are streamlined and, should you fall ill or otherwise have to hand over the reins to someone else, they’ll know exactly what to do with little guidance from you.
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Wait, what is a Standard Operating Procedure (SOP)?
At its most basic, a standard operating procedure is a list of instructions that describe a process step-by-step. SOPs should include just the essential information so anyone following it knows exactly what to do and can execute the task quickly.
Why are SOPs useful for small businesses?
SOPs make obvious sense for larger businesses, but what about if you’re a small team or even a team of one? SOPs help you boil down any process to its core steps and creating SOPs often leads you to find easier ways to complete a process. It can give you a document to refer to whenever you do irregular tasks (so you don’t have to figure out how to do it again) and it allows you to pass off part of the process to another person, should you need to.
What should an SOP do?
An SOP shouldn’t contain waffle - it should contain a repeatable, delegatable process that almost anyone can follow. They should contain the process from start to finish, without missing any steps that someone in the “know” would just do instinctively. Your SOPs can be simple step-by-step instructions, such as (1. Select File > Make a Copy, 2. Edit the document name) or can include pictures or a video to show the process, if you feel it would be beneficial.
What SOPs should I create for my product-based business?
Every business has different SOPs (even if they’ve yet to put them on paper yet), so the SOPs you need to create may vary from the SOPs your competitor has, at least in content. Some of the best SOPs to create are:
Inventory
Inventory is at the core of your business and making sure you have enough, but not too much, will dictate your working capital (how much money you have in your business at any time). When you’re dealing with a lot of inventory, the occasional mistake is inevitable, but creating SOPs can ensure mistakes are rare. You can create SOPs for:
- How you track inventory
- How you count stock
- What to do if there are discrepancies between your inventory system and physical stock
- How you order new inventory (if applicable)
Making sure you’re working with the right inventory system will help you streamline your processes, especially as you grow. We designed Craftybase to give small business owners like you a tool that would keep you doing what you love, not building spreadsheets. If you haven’t started using inventory tracking software or if the inventory tracking software you use isn’t purpose-built for small creators, try Craftybase.
Accounting
Most business owners would prefer doing just about anything else in their business than dealing with their accounting (we know - that’s why we created Craftybase!), but with the right software and systems, it can be a breeze! Creating SOPs will allow you to go into autopilot when it’s time to do the books and will make it much easier if you decide to outsource to a bookkeeper down the line. You can create SOPs for: Reconciling your books
- How to organize receipts
- How to calculate the cost of goods sold
- How to compile documents needed when filing taxes
- Tracking labor costs (including your own)
Manufacturing
If you manufacture your products you can create SOPs for the entire process. Creating SOPs for manufacturing is much like creating a “recipe” for each product, including any tricks you do to get the best results and quality assurance practices.
Packaging & Shipping
Packing and shipping are processes that must be executed correctly, else you risk products becoming damaged by the less-than-careful shipping handlers. If the shipping isn’t done correctly it can also impact the customer experience. You may create SOPs for:
- Selecting the right packing materials
- Putting packing materials together (if you have flat-packed boxes, for example)
- How to pack envelopes, padded envelopes, and boxes, including what order to do things in and when to add the invoice, thank you cards, or marketing materials
- How to purchase shipping
- How to ship orders (such as taking orders to the post office or a drop off point)
- How to pack things you’re taking to sell in person (such as at a local market or fair)
Compliance
Compliance SOPs are all about ensuring you maintain the quality your brand has become known for. You can include SOPs for:
- How to track batches of your products
- Quality testing and assurance
- What to do if there is a problem with the quality of a product (such as repairing it, giving it a discount and selling it as a second, or throwing it away)
Emergency SOPs
Ah, if only business was always straightforward… unfortunately, we live in the real world where there will inevitably be a problem from time to time. When every problem becomes an emergency you have to react to in the moment, business is stressful and often anxiety-inducing. SOPs make emergencies much more matter-of-fact and easy to deal with, whether you’re solving the problem or a member of your team. You can include:
- How to process a cancellation (as well as when to, and what to do when a cancellation request isn’t possible)
- An order hasn’t arrived
- How to process a refund (as well as when to, and what to do when a refund request isn’t valid)
- Replacing a damaged product
- Recalls due to faulty materials or products
Customer Service
Customer service can, for many, feel like it fits into the “Emergency” section above, but it’s best to have SOPs around how you communicate with your customers, as well as what you do to put negative situations right. Creating templates for customer communication can work with your SOPs to make customer service feel easy and stress-free. SOPs you can create are:
- How to deal with negative feedback (especially on social media)
- How to deal with questions and requests
- When and how to inform a customer that X has happened (product/materials are late, you’ve processed their refund request, etc)
- How you communicate with customers
Marketing
Marketing is another area where SOPs can help speed up your processes and allow you to outsource easily. SOPs you can create are:
- How to post on [social media platform]
- How to set up an email marketing campaign
- How to set up [platform] ads
- How to create coupon codes and distribute them
- How to create and add blog posts to your website
- How to create on-brand graphics
- How to look after your customers’ data (including how to remove their data if requested)
- How you launch a new product (such as things you do before the launch and what you do during the launch)
As your small product business grows, you may decide to bring on a new team member, in which case you can create SOPs for the onboarding process so bringing on new people in the future is an even easier process (and one you can delegate). Check out our article about how to train and manage staff for your small business »
While SOPs certainly shine when there’s more than one person working in the business, all these SOPs are just as valuable if you want to stay a solopreneur. Knowing that you simply need to look up a process you’ve done in the past and repeat it makes life so much easier.
Nicole Pascoe
Nicole is the co-founder of Craftybase, inventory and manufacturing software designed for small manufacturers. She has been working with, and writing articles for, small manufacturing businesses for the last 12 years. Her passion is to help makers to become more successful with their online endeavors by empowering them with the knowledge they need to take their business to the next level.