6 Myths About SOPs Every Entrepreneur Should Know

You’re probably well aware that only 1 in 4 new businesses make it to Year 10. 

It’s usually 1 of 2 reasons: 

1. The owner never found true product-market fit—and ran out of money trying, or

2. The owner never figured out how to get work done through other people—so they burnt out, gave up, or ran out of money devolving into unprofitable chaos

Of the businesses that do survive the 10-year mark, most never grow to the size that generate lucrative owner salaries or a reputable legacy. These mom-and-pops may be the backbone of the economy, but for the most part they fall short of what the owner really wanted them to be.

Why?

1. Because the owner never creates and executes the repeatable processes necessary to support recurring revenue, which is undoubtedly the lifeblood of business. 

Recurring revenue allows an organization to get out of the chaos of day-to-day survival, and actually plan for the future. Repeatable processes, or standard operating procedures (SOPs) are the clearly defined and documented ways of working that align teams’ and entire organizations’ output. 

A few examples include the way products/services get sold, the way they get delivered, or even the way in which team members resolve conflict with customers and with each other.

Repeatable processes make it possible for a business to grow in employee count, in revenue, and in profitability by providing predictability.

They give clarity on how things should happen. Just like a business needs recurring revenue to scale, it needs repeatable internal processes to deliver its product or service with consistency and integrity.

Many entrepreneurs have read the books and listened to the experts, and they believe everything I just said…in theory. But there’s a difference between understanding a benefit, and knowing how to get it.

2. The few who develop solid repeatable processes struggle to communicate them.

“Having processes” means typing out a 137-step procedure into a Word document with no context. It gets buried in a folder inside of a folder.

So when a new person lands in the company and needs to learn…there’s no easy way for them to do that. The owner hopes they can pick it all up through osmosis just by being around long enough. Some do, many don’t, and the cycle repeats itself.

Here are 6 myths about SOPs I see all the time. I hope they help you master both of the obstacles above.

6 Myths about SOPs

1. You should document every detail

If you’re a skilled operator, this will likely trip you up. I’ve seen this play out with many Operations leaders. 

The problem with documenting every detail is that when everything is important, nothing is important. When everything is a priority, nothing is a priority. When everything is included, nothing stands out.

The better way is to apply Pareto’s Principle, and focus on documenting the top 20%— the most critical processes, what’s most repeatable, the non-negotiables.

By prioritizing, you create concise, high-impact documentation, avoiding time-consuming, over-detailed documentation of rare cases that take longer to digest than they do to execute.

It will feel like oversimplifying because it is. But once people master the simple version, they can “graduate” so to speak, to learning more of the nuance, the exceptions to the rule. This is the part that takes place on the job, over time.

2. You should document from Day 1

If you’re a systems thinker, you might get stuck here. 

Maybe you read The E-Myth or Traction early on. Both speak to why and how to build systems and processes into your business. Neither speak much to when. That could be because the readers of those books are typically the ones who are no good at building systems and processes.

There’s such a thing as putting systems and processes in too early. That looks like too little openness to change when the stage of the business actually calls for more sales, more trying things out, more chaos before committing to how things get done.

The truth is, you don’t need to document until you need to document. And when it’s time, you’ll do it just like you eat an elephant—one bite at a time and it will never end. The documentation simply becomes a living, breathing part of your business, one that reflects how the company is growing and changing.

There’s no “there” there.

3. What gets documented gets done

SOPs are no help if they don’t get used. In order for the words on the page to turn into action, they need to be easy to access, digestible, and always evolving.

• Easy to Access

Team members shouldn’t have to go on a wild goose chase to find the SOP they need. According to McKinsey, employees spend over 100 minutes each work day just looking for the information they need to do their job. That’s expensive.

Storing everything in a learning management system that can act as your single source of truth, or knowledge base, is easy to implement and has a huge impact. The good ones are mobile-friendly with built-in AI features that make it easy to create new learning content.

• Digestible

The more your SOPs read like a textbook and not a playbook, the less useful they’ll be. Remember, this is communications content. Use a mix of video, graphics, and reading materials to accommodate different learning styles.

• Always Evolving

Update your SOPs in the same way you update your brand messaging. It’s not static; it’s a living, breathing part of your business.

4. People can learn through osmosis

Some people can…but do you really want to risk it?

I hear the “osmosis” term a lot—it basically describes an apprenticeship. Someone works under the Master for years to soak up the craft. It’s certainly one way to transfer knowledge, don’t get me a wrong. 

There are three drawbacks to using the apprenticeship model in today’s modern world:

1. It takes a long, unpredictable amount of time

2. You end up losing people who could be great with better training

3. Knowledge passes from one individual to another, instead of becoming a company asset
   

The better way is to develop an accelerated, systematic apprenticeship program. You do this not by teaching the team what to think, but how to think through decision frameworks, stories, and—yes, SOPs.

5. Processes = bureaucracy

How did Starbucks go from a single coffee shop in 1971 to a global empire just a few decades later? By ensuring that Grande, Fat-Free Vanilla Latte With Almond Milk tastes the same in Tokyo as it does in Idaho, and equipping their employees to make that happen.

Only when your operations are running smoothly can you begin to think about launching a new line of business, opening a new retail location, or adding to your team. Through creating consistency and reducing errors, SOPs ensure the excellence and integrity you need to take your business to that coveted  “next level.”

Processes take the guesswork out of daily operations that keep a business running, so that valuable, finite mental energy can be focused on innovation instead.

The key is to focus on documenting the top 20% of your critical processes, instead of drowning in details that don’t matter.

6. “Anyone” should be able to follow the process

Putting solid processes in place, documenting them, and sharing them don’t cancel out a bad hire. You still need right butts in right seats. People with the right skills. That’s what you need on the front end.

On the back end, you need good leadership. A way to answer the question: “What happens when the process doesn’t get followed?”

It feels counterintuitive at first, but the more thinking and deciding a job requires, the less documentation you’ll have. Where there’s nuance, there are countless exceptions to each rule. And the more thinking and deciding a job requires, the harder it will be to find the right people.

So if processes provide so much structure and productivity to organizations, why don’t more people have them? 

Two reasons:

1. We think of processes as important, not urgent. And when you’re already on the hamster wheel...well, you know.

2. When the subject matter requires thinking and deciding, the subject matter experts are prone to say, “You can’t teach this; it has to be learned.” Experience certainly matters, but there’s almost always a way to boil down complex topics into simple and repeatable frameworks.

Which myth are you still believing?