Business: The Complete Guide to Creating Systems and SOPs in Your Business
The following is a guest post by my friend Aaron Lynn. I’ve been getting emails requests over the years about how to implement systems into businesses. He’s one of the best at explaining this topic.
Everyone likes to talk about standard operating procedures (SOPs) and systems, but going from the idea of having them to actually working on them is different.
As Charles put it to me:
“My readers LOVE the idea of adding systems to their businesses. They know that they’re their own bottleneck to growth. However, there’s a huge gap between knowing what systems are, and being able to implement them.
Most books on systems thinking are too theoretical. I’m wondering if we can create a framework that’s simple enough for people to put into action.”
One of my past businesses was a consulting firm with about 30 staff. They had zero systems when I arrived. There had always been a desire to systemize things, but they lacked the know-how and a specific process for doing so.
Over the span of a couple of years, we systemized everything — daily operations, marketing, accounting and everything in-between.
And more importantly, we put in place a systemization machine for creating, maintaining and updating SOPs and systems in perpetuity.
After this guide, you will be able do the same in your own business.
What Are Systems and Why Bother With Them?
Most businesses start with just you. You’re the marketing department, finance, and the person dealing with customer complaints.
As the business grows, you’re going to face growing pains because you can’t do everything yourself. And hiring employees isn’t automatically going to be the perfect solution.
Let’s say you’re building an e-commerce store. You’re going to need a customer service (CS) representative at some point to answer emails.
- The CS rep is scared of making decisions. They’re constantly bothering you questions on what to do.
- The CS rep answers 50+ emails a day individually. It takes them 2.5 hours.
- You have constant turnover. Every time you hire a new CS rep, you have to spend two weeks training them.
- The CS Rep knows your decision-making process. In the 4 Hour Work Week, Tim Ferriss told his reps they could make any decision that costs under $100.
- All of your reps know what the most common questions are. The company has created templates to speed up the process. The 2.5 hours to answer emails goes down to one hour.
- You have a constant turnover. However, now it only takes days to train new CS reps. The previous CS reps created SOP’s and screencasts for your new employee to study.
Can you see the difference that systems and SOP’s can make in your business?
Think of them as steroids for your employees.
Building a Systemization Machine
As Charles mentioned, most people lack a simple framework for implementing systems and SOPs in their business.
I call this framework the Systemization Machine and it looks like this:
The Systemization Machine
The five parts are:
- The Systemization Mindset.
- SOP List.
- SOP Creation Process.
- Fuel and Maintenance.
Let’s deconstruct each of these parts and see how you can implement them in your business.
1. The Systemization Mindset
Photo by Dollar Gill.
Your mindset and attitude skew the probability of actually implementing systems in your business… or not.
This is 90% of the battle and process. The rest is just technical implementation.
By sorting out your mindset first, you are shifting from desire mode into implementation mode.
Making the decision to systemize
Making the decision to systemize your business is like any other decision. You decide to make a change, then back it up with adequate reasons and enough emotional content until that change happens.
Systemizing your business is working on your business rather than simply working in your business.
It is as close as you will ever get to having a “once and done” business. You set up a system, put in place an SOP, and then let your technology and team run it for you.
The simplest way to build enough reasons to go from desiring systemization to implementing it is to draw up a list of benefits, such as:
- Getting all the small technical things right all the time — for example, specific pixel sizes or file formats.
- Reducing errors.
- Increasing accuracy.
- Speeding up processes.
- Eliminating unnecessary processes.
- Automating manual processes.
- Everything is running better.
- Less stress.
- More personal time.
- More money.
Realizing what is possible with systemization
If you need more reasons to back up your decision to systemize, here are some from my own experience and that of clients over the years.
The first is that it just makes rational sense. (If there’s any human endeavor where rationality matters, it’s business.) You want a better, faster, and stronger business, and systems are how you get there.
The second is that once you have turned something into a system and created an SOP for it, you can improve it and outsource it.
The third is that you are building the capacity to scale.
You’re reading this on Charles Ngo’s blog which means that you are already a marketing badass.
You’ve optimized your campaigns and creatives and copy, and you’re likely working harder than a teenager trying to get his first makeout session.
You’ve put in the hours and effort, but the ever-elusive “scaling” seems just out of reach like there’s some invisible ceiling impeding your progress.
This invisible ceiling is the capacity to scale — you simply lack the systems to progress.
Wherever your business currently is, ask yourself — if I threw 10x the ad spend, traffic or inputs into it, would the system be able to cope?
If not, you need to systemize.
The fourth reason is that by systemizing you will have a baseline for implementing new things that you learn.
I’ve always considered this one of the coolest things about systems. You get to read about the amazing tools, techniques, and strategies that someone like Charles Ngo or Dan Kennedy uses… and then you can see exactly how they will fit into your existing systems.
If you have no systems, this doesn’t work. You end up struggling to work out what you’re currently doing, and if this new thing replaces it or doubles up or otherwise.
The last reason is that systemization is fun.
OK, maybe that’s just me.
But if you take this framework and implement it in your business, you’ll build a competitive advantage over time.
Now that we have our mindset sorted out, everything else in the framework is just technicalities and practical implementation. Let’s get started.
2. Your SOP List: Working Out What You Need to Systemize and Write SOPs For
Photo by Todd Quackenbush.
In order to systemize, we need to know what we want to systemize. We can do this by:
- Drawing up a list of things to systemize.
- Filtering this list.
- Prioritizing this list.
Drawing up a list of things to systemize
You can start drawing up your list of things to systemize by starting with you.
Write down all the business-related things that you do for every day of the week — everything you do on a Monday, Tuesday, Wednesday, etc.
And then remove any duplicates, and group together your list.
Have your staff do the same.
Next, think of all the things that you do regularly to run the business that doesn’t happen on a weekly basis. This could be things like monthly reporting or reviewing the income statement (P&L).
For example, you may end up with a daily list of:
- Check stats.
- Campaign optimization.
- Development work for new campaigns.
- Communicate with staff.
- Communicate with affiliate managers and partners.
And a monthly/irregular list of:
- File taxes.
- Do payroll.
- Review income statements (P&L) and accounts.
- Strategic planning.
Filtering your list
Once you have a list similar to the above, you need to filter it, because not everything needs to be systemized right away.
When we create efficient systems, we usually do one of four things with them:
Eliminate, means if you’re doing something you don’t need to be doing, you simply stop — and save yourself time and resources.
Simplify, means you create an SOP and then streamline and remove redundant steps from it.
Automate, means you turn a manual process (SOP) into an automated process done by software, rather than humans.
Delegate, means you turn a process (SOP) over to your staff and have them do it for you.
Systemization begins with simplifying things. Things that can be eliminated don’t need to be systemized, you just need to stop doing them.
So take your list and filter it. For your initial creation of SOPs and systems, you will focus on things that can be simplified.
Prioritizing your SOP list
Now you have a filtered list of things that you want to turn into SOPs.
So what do you do first?
If we think about efficiency, we want to systemize the things that will give us the most “bang for buck” in order to gain momentum in our efforts.
Your high priority SOPs will be:
- The things you hate doing the most.
- The things you can easily systemize (within 1 day).
- SOPs can get complex and some of them can take days or even a week to put together.
- The things you can teach your existing team to do immediately based on their current skill sets.
- i.e., minimal time spent on training.
Your medium priority SOPs will be:
- Anything leftover that you have to do daily.
- So that you can speed up the execution of those daily things, thus saving you time.
- Anything that’s urgent on a regular basis.
Your low priority SOPS will be:
- Anything not urgent.
- Anything leftover.
When you start creating your SOPs, you will start and clear all the highs first, then the mediums, then the lows.
3. Infrastructure for SOPs: Apps and tools
Now that you’re ready to systemize and you know what to systemize, you need to set up some basic infrastructure.
Many business people who are new to systems (and some who are not-so-new) make the mistake of trying to manage it all in Word documents or Google Docs.
This is a mistake.
You need to use a proper tool for the purpose and that tool is a corporate wiki or knowledge management system.
And the great news is, at a basic tier all the major wikis available today are free.
All the options are basically the same, it’s just a matter of preference for the interface and look-and-feel.
Wikis can be used for many things, but for the purposes of this guide, we’ll look at how to use them for managing our SOPs.
Recording and capture apps
Beyond just a wiki, you will also need some recording and capture apps for screenshots, annotation and screen recordings.
You need a screen recording tool like:
You also need a static screenshot tool like:
- The built-in MacOS screenshot tool or Windows snipping tool.
- Cleanshot X.
Now that you have a wiki and some capture tools, you need to prepare a folder structure for storing your SOPs.
I recommend creating a singular space called Standard Operating Procedures in your wiki.
Note: Different wikis call their top-level containers different things:
- Confluence = space.
- Tettra = category.
- GetGuru = collection.
Within this space you want the following pages or sub-categories:
- Training. This includes basic company procedures and how to use specific apps.
- Organizational Data. This is a place for your culture, mission and strategic planning documents.
- Business-specific areas.
Business-specific areas are, well, business-specific.
If you are an affiliate marketer, you may have one area per traffic source (e.g., Facebook Ads or Google Ads) and one area for reporting procedures.
If you are a consultant, you may have one area for consulting and another for customer service.
If you are an e-commerce store, you may have one area for product design and one for fulfillment procedures.
4. Step-By-Step SOP Creation
Step 4 is the meat of the process — how to actually write standard operating procedures (SOPs).
This can be daunting for anyone unfamiliar with the process, but it is not meant to be complicated.
Writing SOPs is really just about sitting down and thinking about it and writing. Often you’ll get to the end and think “… that’s it?”
And most of the time, it is.
A template for SOPS
Here is a template you can use:
- Title. Give your SOP a name, e.g., “Daily adjustments in Facebook Ads”.
- Who. Specify who can perform the SOP.
- What. Give a high-level 1-2 sentence description of the SOP. This is for the benefit of other people who will read it.
- When. Specify if the process is to be done daily, weekly, monthly, or based around some trigger.
- Process. Give the numbered, sequential steps needed to complete the process. This should include both the mindset and the actual actions to be performed.
- Results. Provide a checklist of things a reviewer should look at to make sure the process has been done correctly.
Some tips for writing the process:
- Use bullets and numbered lists.
- Use both text and screenshots, with annotations.
- You can include a video if you want, but also write out the steps in text so you don’t have to watch the video every time.
- Don’t use audio.
- Use headings and subheadings liberally.
- Link to other SOPs is your wiki if relevant.
- Link to external training sources if applicable.
I highly recommend creating this as a global template in your wiki system, so you can quickly select and populate your SOP.
An example SOP
Here’s an example SOP to show you how the template works:
Handling incoming chat or phone inquiries.
Whoever answers the phone. This will usually be a sales rep.
This process describes how to handle an incoming customer inquiry via phone or a direct messaging channel (WeChat, Whatsapp, Facebook, etc).
Whenever a prospect or customer contacts us first.
- Answer the phone/message.
- Ask how we can help them.
- Record the details and what we can help them within shorthand on paper, in a notebook, on a post-it or otherwise.
- If they are a new prospect, get their full name, phone number, and email.
- Tell the prospect/customer exactly what we are going to do for them and what they need to do next (if anything). e.g.,
- Call them back with the information.
- Follow up in a week’s time.
- Update their information for them.
- Record the interaction in the CRM.
- Create a new prospect record if necessary.
- Create a file note against the customer record.
- Create a next action and task.
- Assign that next action and task to the relevant person
- Client record created or updated in CRM. If it isn’t written down, it didn’t happen.
- Next action noted and assigned.
As you can see, there is nothing complicated about creating SOPs. Most people overthink and overcomplicate them. All you really need to do is write them out.
Advanced: Creating SOPs like a boss
Once you’ve gotten the hang of creating SOPs, you can step it up a level.
There are two ways to do this:
Record and assign
The first variation is where you perform the process you are systemizing yourself, and screen record it with audio narration.
You then assign this to a staff member to listen to and write an SOP from.
Train and assign
The second variation is to do a training session for the staff who will be doing the process and to record it on camera or via screen recording.
You then assign this to a staff member and have them watch it and write an SOP from.
This is my preferred method as it forces me to think a bit about the process before teaching it, which usually results in a better quality SOP.
I did this a lot in my prior business — schedule a training session, read off a mind map, record the whole thing on camera and then hand the mind map and recording to a team member to write the SOP.
5. Fuel and maintenance
Photo by Vincent Ghilione.
How much time the initial run-through of your SOP List takes, will depend on the complexity of your business. It could be a few weeks, months, or even up to a year.
But once that’s done and out of the way, then what?
What you need to do is to fuel and maintain your Systemization Machine.
And this is very simply about:
- Repeating Step 4 (SOP Creation) for any new processes that come up.
- Keeping your SOP space organized.
- Having team members update processes with new information and explanations as they do them. This is the main mechanism for improving and streamlining your SOPs over time.
You don’t need to regularly clean out your SOP space unless you want to. If your team members are working properly, then each SOP update is timestamped and versioned by your wiki software automatically, so you know what changes have been made.
What To Do Next
I like to end my guides with some actionable steps that you can use right away in your business.
The first is to actually use the Systemization Machine — it’s effective and tested, and it works.
The second is to learn from the SOPs of others. Here are a couple of SOPs that Charles has shared on his site before:
The third is to download my Standard Operating Procedure SOP and upload it into your wiki.
This is something I give to my consulting clients and it describes how to write an SOP. You can refer to it yourself or use it to train your team.
And for readers of Charles’ blog, I’m giving it away 100% free.
The last is if you have any questions about systemization, SOPs or anything else, ask away in the comments — I’ll be around to answer them.
About the Guest Author
Cover Photo by Denys Nevozhai.