Key performance indicators, or KPIs, are an essential tool in the business toolbox. That is why you need to know how to write KPIs for your business.

Your business’s KPIs indicate how well it is doing in relation to its strategic goals as a measurable metric. It is important to know that KPIs aren’t just numbers, although they are often used interchangeably with metrics. Several studies have shown that tracking department and individual performance allows for the necessary adjustments in strategy execution to meet business objectives. Moreover, these indicators enable you to break down your strategic objectives into smaller, more concrete data points.

How to write KPIs

How to write KPIs?

Whenever you write or develop a KPI, keep in mind how it relates to a specific business outcome or objective. It is important to develop KPIs that are tailored to your business needs and are designed to help you reach your goals. Write a KPI according to the steps below.

Here are details on how to write KPIs:

1. Establish a clear KPI for your business

Now, how to write KPIs for your business start with setting a clear objective. It might be the most important component of KPI development.

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There should be an intimate link between a KPI and a key business objective. Rather than something your organization might think is important just because someone in it thinks so. It needs to be essential to the success of the organization.

In any other case, you are setting a target that does not correspond to an objective. In other words, you’re working towards an objective that has no bearing on your organization. If this happens, you will waste time, money, and other resources that could have been better allocated elsewhere.

The key point is that KPIs should go beyond arbitrary numbers. They must demonstrate what your organization is trying to achieve. By examining a company’s KPIs, you can (or should be able to) discover a lot about its business model.

All of this will be lost if no clear objective is set forth.

2. Share your KPI with stakeholders

You can’t know how to write KPIs and make your KPIs work if you don’t communicate them properly. If your employees don’t know what your goals are, how are they supposed to carry out your vision for the organization? If you don’t share your KPI, you may alienate and frustrate your employees and other stakeholders who are unable to see the direction of your organization.

How to write KPIs

It’s another thing to share your KPIs with your stakeholders (again, something too few organizations do). But what’s more important is that you must communicate with them right away.

To be effective, KPIs must be contextualized. In order to do so, you must explain not just what you measure, but also why you measure it. Without them, those numbers on the screen have no meaning for you or your employees.

Ensure your employees understand why you measure what you measure. Be ready to explain why you have chosen one KPI over another. And most importantly? Pay attention. Key performance indicators aren’t infallible. Everyone isn’t going to know what they mean. Your employees can help you identify where the underlying goals of your organization aren’t being clearly expressed

Imagine that you get asked a lot about why your company doesn’t track profit. Employees might think that your company isn’t transparent about profits. Business is, after all, about making money. At some point in time, revenue might not be the most important aspect of your organization. Perhaps you’re planning a major research and development investment, or you’re planning to make some major acquisitions. Such a question is a sign that you need to communicate your KPIs and your strategic goals more effectively.

What’s more, your employees might even be able to suggest ways to improve your KPIs.

3. Review KPIs every week or every month

The development and maintenance of your KPIs require regular checking in. You should track your progress against a KPI (otherwise, what would be the point in setting one in the first place?) but equally important is tracking your progress so you can determine whether you were successful in developing the KPI in the first place.

A KPI may not be successful in all cases. It is possible to have objectives that are unattainable (more on that below). Sometimes, objectives fail to achieve their underlying business purpose. Monitoring your KPIs regularly is the only way to determine if it’s time to change them.

4. Make sure the KPI is applicable

Before you embark on how to write KPIs, here are five steps you must consider to make your KPIs applicable:

  1. Identify and review business objectives
  2. Perform a performance analysis
  3. Establish short- and long-term targets for KPIs
  4. Team up with your coworkers to review targets
  5. Reassess and adjust progress

We covered most of this already, but it’s worthwhile to emphasize the need to set short- and long-term goals. After you set your goal and have a timeline (such as your fiscal year, or the next few quarters), you can work backward and identify the milestones along the way.

In the first quarter of the year, for example, you would like to sign up 1000 readers to your blog post and articles. In order to achieve these goals, you’ll need to set monthly, biweekly, and even weekly targets. As a result, you’ll be able to evaluate your progress and change course as needed to reach your long-term goal.

5. Change your KPIs to meet changing business needs

In the absence of regular updates, KPIs can quickly become obsolete.

Imagine, for example, that your company has recently launched a new product line or expanded internationally. Until your KPIs are updated, your team will keep chasing targets that don’t necessarily capture the changes in tactical or strategic direction.

How to write KPIs

By looking at your results, you may feel that you are continuing your excellent performance. It is possible that you may be tracking KPIs that fail to accurately reflect your efforts’ impact on underlying strategic goals.

Taking a look at your KPIs each month (or, ideally, each week) will give you the opportunity to fine-tune your strategy, or to completely change your course.

It is possible that you will discover new and perhaps more efficient routes to the same destination.

6. Review the KPI to ensure it is achievable

Achieving your team’s targets is crucial. Your team may give up before they even get started if your target is too high. A low target will leave you wondering what to do once you’ve accomplished your annual goals a couple of months into the new year.

It is crucial to analyze your current performance. If you ignore this, you’ll be left searching for numbers without foundation. You can also start by considering your current performance to determine where you need to improve.

Set a baseline for what you’ve already accomplished by rooting around in the data you’ve already collected. There are many tools out there that can be used to track revenue and gross margins, including Google Analytics.

7. Keep your KPI objectives up to date

There is no such thing as a static KPI. These must always keep evolving, updating, and changing. You may chase goals that aren’t relevant to your business if you’re setting and forgetting your KPIs.

Regularly check-in not only to see how you’re doing against your KPIs but also to see which ones need to be changed or scrapped.

All of this might seem exhausting to someone who hasn’t developed KPIs before.

The good news is that once you go through this procedure a few times, it’ll become much easier for you to do it again and again.

8. The final step

A KPI is a key measure of how successful your business is and can be used to make informed adjustments as needed.

Individual KPIs are, however, limited in their usefulness.

KPIs are only as useful as they are useful. If it no longer serves its purpose, you don’t need to hesitate to throw it away and start building new ones that align better with your underlying business objectives.

What are lagging KPIs and leading KPIs?

Leading KPIs

In leading KPIs, performance is measured before a trend is evident in the process or outcome. A leading KPI should predict trends and changes and be forward-looking. Such a metric is used to assess the performance of a process or system. A leading indicator defines what the business needs to accomplish its goals by considering what actions it needs to take.

Leading KPIs set a benchmark for a company even though they may not be accurate all the time, such as:

  • Increase in subscriptions per year
  • The number of visitors to the website
  • Share of the market growth in percentage
  • Customer base that purchases software

How to write KPIs

Lagging KPIs

The lagging KPI measures the performance of a business or process rather than the trend that it has followed. Lagging indicators provide information about the efficiency of the system or process.

Lagging indicators can be used to provide insight into an organization’s current performance, such as:

  • The corporate event was attended by how many managers?
  • How many products were produced in the past year?
  • How much did the company earn in net income?

They both provide businesses with information about current conditions and future trends. In addition, these metrics provide insight into the company’s progress toward its goals. KPIs can also be rethought in light of the threats posed by competitors and disruptions, as well as the opportunities created by customer needs, product features, and newly introduced capabilities.


KPIs are most effective when they are simple to understand. Every employee in a company needs to know what the expected outcomes are, how regularly you measure progress towards them, and how you plan to measure them. It is crucial that people at all levels of the organization have access to these performance metrics, not just those with ownership of them.

I hope right now you understand how to write KPIs.

Securing the buy-in of all stakeholders requires communicating the organization’s vision, mission, strategic objectives, and key performance indicators.

All employees can understand what they do makes a difference to the achievement of the organization’s goals with the help of well-designed KPIs. The strategic objectives that motivate everyone to achieve them are clearly laid out, so everyone knows precisely how their work aligns with them. As a result, their teams will be able to meet their collective targets and improve efficiency.

Finally, I hope you now know how to write KPIs for your business. How to write KPIs might differ a little bit depending on the business type, size, and many other business components