Creating SOPs 101
The Amplified Impact Podcast
June 21st, 2023
In this episode, I want to tackle a common challenge faced by new businesses trying to scale.
When you’re just starting out as a founder, you end up wearing multiple hats…product design, marketing, sales, fulfillment, and more.
The problem is, you’re often figuring things out as you go, without documenting or refining your processes.
As your business grows and you start getting more customers and cash flow, you realize you can’t do it all by yourself.
Hiring seems like the logical solution but without proper systems and processes in place, training new hires becomes difficult.
You may find yourself showing them how to do things quickly, without providing clear expectations or comprehensive training.
Frustration sets in when they don’t perform as well as you, leading you to believe that nobody can do the job like you can.
This vicious cycle prevents you from effectively delegating tasks and perpetuates the myth that you’re the only one capable of doing them.
To break free from this cycle, you need standard operating procedures (SOPs) that you can hand off to your team members.
Together, you can refine and optimize those procedures.
Remember…establishing SOPs and training your team effectively are vital for scaling your business.
TWEETABLE QUOTE:
“Opportunity is usually far, far more expensive to your business than the money that would go into just hiring the person.”- Anthony Vicino
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Episode Transcript:
Anthony Vicino [00:00:01]:
What’s up, everybody? Welcome to the podcast. I’m going to share with you one of the reasons I think new businesses struggle to scale. It’s because in the beginning, when it’s just you as the founder, you’re probably wearing all the hats in your business. You are doing the product design, the marketing, the customer sales, the the fulfillment. You’re doing the financials like you’re doing everything and you in the beginning, don’t really know what you’re doing. So you start to create systems. You kind of like struggle bust your way through it and you start to figure out, well, this is the way that I do this thing. And for better or worse, that just becomes your standard operating procedure.
Anthony Vicino [00:00:38]:
And you never really stop to sit down and document it in a formalized way. You don’t necessarily stop to reflect on, is this the best way to be doing this even? Because you’re just kind of nose to the grindstone. You’re so deep in the business that you’re just doing the things and you’re just trying to keep the boat moving forward. So like, you’re putting the paddle in the water and you’re pulling with all your might. You’re not really sitting to evaluate, am I sitting in the perfect spot on the boat? Am I putting the paddle into the water and stroking it? That’s a weird I don’t know anything about paddling, obviously, but before we can start worrying about optimizing, in the beginning we’re just focused on survival. And so what ends up happening is then if you do it right and you find success, you start to get customers, you start to get cash flow, you start to build and you start to go, oh, I can’t now do all these things. I can’t fulfill the customers and there’s too much demand and this is a good problem to have, but this is where you start to get too far over your skis and you can potentially get really hurt and blow up, right? And so this is where people start looking at hiring and saying, we need to bring somebody onto the team so that they can take over maybe this aspect of the business. The problem is then when you bring people in, it’s very hard to train them into give them expectations.
Anthony Vicino [00:01:50]:
If you don’t already have systems and processes in place and a lot of time, what business owners do is they’re like, well, this is how I do it, to quickly show you how. And then the person kind of is left to figure it out on their own. And the chances are they’re not going to figure it out on their own. And even if they do, it’s going to them a while and a lot of trial and error. Because if you think about how long it took you as the business owner to get to your level of competency and how much trial and error it took you in that particular procedure, it’s only reasonable to think that it’s going to take them an equivalent amount of time, especially if you haven’t really refined how you’re going to train or teach them the procedure, which most entrepreneurs don’t do. They just hire the person. Like, I don’t have time to really train you, so I just need you to kind of dive in and figure it out. And then we get frustrated because they don’t figure it out, or as they do figure it out, they’re not doing it as well as you were doing it.
Anthony Vicino [00:02:37]:
They’re maybe only 60% as effective. So then you get frustrated because you look back over and you’re like, what the hell? I hired you to take work off my plate. But in fact, you’re just making more errors, which is causing me to now have to look over your shoulder. And so I’m actually not removed from that activity at all now. I’m just even more into it and having to solve problems that should never have been there in the first place had I just done it myself. And so what most entrepreneurs do then is they dive back in, they take that thing off that person’s plate, they start doing it themselves. And if you get into this trap, it becomes this deadly cycle where you start to believe that nobody else can do the thing as well as you. You stop hiring, you stop training, because you get burned by it so many times.
Anthony Vicino [00:03:18]:
You get frustrated by the fact that nobody seems to be able to step in and do the thing that you’re like, well, fuck, I’m just going to continue doing it myself. And I was in this place for a while myself, where I was like, man, nobody can do this as well as me. Every time I bring them in, they just don’t get it. They don’t understand. And then I would just take it back off their plate, and then they’re just sitting there twiddling their thumbs while I’m just doing everything. And it took me a long time to realize, like, I was the problem in that equation, that I wasn’t hiring and training them properly so that they were put in a position to actually succeed. And so the thing that really that you need to have in place before any of this can have a hope of working is standard operating procedures that you can hand to that other person. And one of the things that I found very beneficial in the early days of building businesses was just a simple process of taking a screen recording of myself talking through how to do the task as I do it.
Anthony Vicino [00:04:18]:
So if that’s like doing financial reporting, or that’s doing email management, or that’s doing customer support, turn on the loom or the zoom screen recording and go through the process as you document and talk through it. And then you can give that video to the person that you’ve hired, and then you have them create the standard operating procedure based off of it, you have them systemize it, turn it into a step by step process, and then together you can kind of refine it. But I find that to be a very easy way to initially have your processes documented, because, again, as a busy entrepreneur, you don’t have time to sit down and get into the weeds of every single system in your business and create a perfect checklist of, like, here’s exactly the best way to do it. I don’t think that’s the best use of your time, but you need to get 80% of the ideas out of your head and into the hands of the person that you expect to do the work. Otherwise, they’re going to be just over their head and have no chance of ever succeeding. So you need to do it in an efficient way where it doesn’t take a lot of time and energy for you, and it’s easy for them to get their feet into it and get started. So that’s been something that’s been very beneficial for me. You just document through a screen recording what you actually do in the process, and then you leave it to them to create the standard operating procedure.
Anthony Vicino [00:05:33]:
Then you both refine it together, try that out, start doing it sooner than you think. Truly, as an entrepreneur, there’s only two times to hire somebody. You either hire too soon or you hire too late. And I was talking about this with actually our lawyer the other day who was going through some growth pains with his business, and he called up for some advice. And the idea that you either hire too soon or too late, like, nobody ever hires at the perfectly right moment. And the problem with hiring too soon is it costs you money. The problem with hiring too late is that it costs you opportunity, right? So your team can’t run at the opportunities because you don’t have the people there, you don’t have the infrastructure. Whereas when you hire too soon, it costs you money in the sense that you have to start paying out a salary, and you might not be able to afford that in the early days.
Anthony Vicino [00:06:16]:
And so when I think about those two costs or those two times that you can pay, you can either hire too soon or hire too late. The reason most of us then wait to hire too late is because it’s hard to quantify the lost opportunity. You can’t put that on a spreadsheet in the same way that you can put, okay, if we hire too soon, that’s going to cost me $60,000 a year. We can see that on a spreadsheet. We can see that number. And because you can’t quantify the lost opportunity, we tend to think, oh, $60,000 is going to be more. And so we wait usually to hire too late as a result, and we miss opportunity. In my experience, though, it is always better to hire sooner than it is to hire too late.
Anthony Vicino [00:06:54]:
Because opportunity is usually far, far more expensive to your business than the money that would go into just hiring the person. So I want you to think about that. And another little reframe that really helped me get comfortable with the idea of hiring people sooner is, yes, you are bringing somebody on conceivably to do customer service and you’re going to pay them $60,000 a year. And you’re like, oh my God, where am I going to come up with $60,000? Well, here’s the thing. The easy way to break this down mentally is to realize you don’t need to come up with $60,000. You just need to come up with $5,000 a month. That’s it, right? Like they need their salary $5,000 a month every month for twelve months. That’s $60,000.
Anthony Vicino [00:07:33]:
So all you have to really think about is to bring that 60,000 down to 5000, say, what can I do to get another $5,000 a month? Not 60,000, just 5000. And I find that is a much easier place to reframe from and then feel the mental load lighten a bit to say, okay, maybe I will hire sooner. So this is a long, this, we took a weird turn there at the end, started talking about hiring and didn’t necessarily mean to get into that one and wanted to talk more about the standard operating procedures and training and that side of things. But hopefully you got a little bit of value out of this regardless of where you are in your journey. So as always, guys and gals, I appreciate you being here. Can’t wait to see you tomorrow for another episode of Amplified Impact. But until then, stay hyper focused, my friend.
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