Benefits of SOPs for Family-run businesses


In India, we accommodate 30 top Billionaires who are ranked in the Forbes Top 500 richest person in the world. And, almost every business house has been flourished from a family business. Starting from a small family business, many have reached heights in the international forum and shown the business acumen and level of dedication in our country.

But, in every part of our country Family Business can’t flourish this way. The reason being, indiscipline. Businesses in India deal with millions of Rupees, yet a single Standard of Procedure is very difficult to find. It leads to chaos in Business and ultimately results in its demise. So, a proper SOP should always be coded and maintained in Family business as well.

Reasons are listed below:

  • Reduction in Error– A proper SOP works as a Hand-out to workers. Strictly following to which, chances of error of omission and commission can be reduced.
  • Establish Hierarchy– A proper SOP documents every chain of command, hence it saves the time of organisation.
  • Employee Efficiency– Following SOP, may positively affect the efficiency and productivity in Employees and workers.
  • Delegation of Work- With the help of SOP, a delegation of work becomes easy. It helps in avoiding unnecessary delay in decision making.
  • Save time in Training– An SOP can save much of time in giving on-job training. By going through SOP, a new employee can grasp organisation’s policy easily.
  • Legally Effective– A proper SOP can always guide the employee about the legal requirements or legal aspects of every issue. Hence, it becomes easier for the management to have control over crucial issues.

Having mentioned the need for the SOP in family run business, we should then discuss what an SOP should consist of.

  • Checklist to Auditors– An SOP should be that descriptive so that an auditor can easily check and review the operation efficiency.
  • Quality of operation- In any manufacturing or service-based company, quality of operation is a vital thing. The SOP should contain norms to check and review in regular interval about the operation efficiency in the Family run Business.
  • A guide to investigation– SOP should contain the full procedures to investigate matters if any need arises of fraud or inefficiency.
  • To act as archive-SOP should be dynamic in nature. It should reflect the organisation’s history or past in tackling the crucial situation and based on experience it should be evolved.
  • Guide to newcomers– A newcomer is trained in big MNCs, but in the case of family-run business, training a newcomer for a longer period is not cost-effective. So, SOP should be drafted in such a way that it guides the newcomer to the organisation without hampering anyone’s efficiency.
  • A tool of confidence to stakeholders– Elaborating every aspect of business operation gives immense confidence to all the stakeholders in the business. And this may translate to higher credit flow or cash flow, which ultimately helps in the expansion of Business.

If Business is the lifeblood of the Economy, SOPs are the blood cells. An SOP always makes the business process smooth and free of human error. This way a lot of time and financial worth is saved. So, be it a Big MNC or a small family run business, the need for a detailed SOP is inevitable.


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