Before you read further, just keep in mind that a project charter can:
- Ease team, client, and stakeholder communication
- Help you get approval for starting work
- Keep all project elements aligned with your goals and business strategy
Note: If you’re looking for an online tool to help you prioritize tasks, check out this list of task management tools.
I will show you how this document can help you and exactly what steps you should take to create a great first project charter—plus, you’ll get access to a free project charter example.
- What is a Project Charter?
- Project Charter Purpose
- The Elements of a Project Charter
- Project Charter Template
- Steps for Building a Project Charter
But first…
What is a Project Charter?
According to PMI®’s PMBOK Guide (5th edition), a project charter is a “document issued by the project initiator or sponsor that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities.”
A project charter is a brief document that points out the project’s scope, participants, benefits, and objectives. It is an essential asset of project management.
It’s usually created by a project manager and presented to stakeholders for approval. This is why the charter is written during initiation, before the project’s kick-off.
It’s your go-to document that states that you and your team, stakeholders, sponsor, and client are on the same page. It’s also a reminder of all project agreements.
A common misconception is to believe that the project’s sponsor is entirely responsible for writing the project charter. Sponsors might not have the time or project management experience to do this. They usually delegate another person (commonly a project manager) to do this in their place (or help them in the process) and authorize its final version.
A project charter can help establish your responsibility as a project manager and keep the entire team on the same page even before work on the project starts.
Note: The project charter is different from a project management plan. The latter is a comprehensive document that contains all the steps and details on how a project should be executed. Comparatively, a project charter doesn’t include all tasks that team members are responsible for and doesn’t further develop upon the execution stage. Most project charters are short and informative compared to detailed project management plans. So keep them short at around 3-5 pages.
What is the purpose of a project charter?
Why should you write up a project charter? Here are three main benefits of using a project charter.
1. You get authorization to start the project. Showing stakeholders what the project’s outcomes can be, what risks or constraints it could face, and how much they will need to invest in the project. This information can help them authorize projects and rank them accordingly.
Tip: Always think about the Return on Investment. When approving a project, stakeholders will first consider what they can gain from the project. That’s why it’s best to always focus on a project’s benefits and profit opportunities.
2. You show stakeholders how you’ll distribute their budget and resources. Creating a project charter is your perfect chance to identify the main stakeholders and determine their needs and problems. Based on these, you’ll estimate the project’s costs and name the resources you’ll most likely need.
Tip: Think of it as a sales document or sales pitch. Through it, you’ll present stakeholders with a brief presentation showing them precisely what they get for the money they’re spending. This helps them make decisions and prioritize their needs.
3. You’ll use it as a reference document during project development. You’ll likely use the project charter throughout all project management phases, using online project management tools. It’s a good starting point for managing the project’s scope, as you’ve already outlined its basics. You’ll also use it when completing your objectives because a correctly built project charter guides the team through the methods they need to follow and the obstacles they encounter.
Tip: Use the project charter for your team’s meetings to remind your colleagues of your objectives and the project’s benefits.
What does a project charter include?
Page 1 of a free project charter template in Google Docs provided by Paymo
Covering all vital project charter elements that can impact a project’s evolution in the charter is vital.
1. General Information
You must fill in the basics, such as the project’s name, ID, and general information that can be scanned easily.
2. Project Purpose and Background
Answer the following question: Why are we starting this project?
Outline the project’s background and your and your stakeholders’ reasons for starting the project. These can be internal (e.g., new strategic goals within the company) or external (e.g., market or competitor changes).
Tip: Meet your clients and stakeholders to see their expectations and motivations. This allows you to scope out potential misunderstandings affecting the project’s evolution.
3. Project Goals, Objectives, and Metrics
Knowing your objectives is one of the reasons why you’re writing this project charter. Define specific goals. Remember that you’ll then have to measure your progress against them and make adjustments. So make sure they’re measurable and think of how you’ll be able to meet these targets.
Tip: Create SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives. This way, you’ll find out precisely if you achieved them, how you did it, and the benefits. Here’s an example of a SMART goal: Increase the website’s organic traffic by 20% in 3 months by creating new blog posts. Or go for the OKR methodology, a coherent framework for goal-setting.
4. Project Stakeholders
Mention all key stakeholders from the very beginning. A stakeholder is a person or group that can influence a project AND is affected by its success or failure. Stakeholders can be clients, managers, company employees, suppliers, investors, communities, administrators, organizations, etc.
The project charter should mention who’s in charge of funding, project charter approval, and any other vital duties.
Tip: It’s OK to mention every stakeholder for small projects. But for larger projects, you can include only those with decisive power in your project charter and their role. But this is entirely up to your needs and the involvement of the project’s stakeholders.
5. Project Scope
This part refers to the project’s limits, what’s OK to work on, and what you should avoid. Define clear guidelines on what your team is allowed or not to do to finish a project.
Tip: Pay close attention to this part, as you could later use it for your scope management steps and when creating the Project Scope Statement.
6. Project Risks, Assumptions, Constraints, and Dependencies
A risk is any event, factor, task, action, or situation that negatively affects a project’s evolution, timeline, costs, resources, goals, and results. A risk that’s not controlled nor removed on time can severely damage a project, even end it altogether. Some examples are stakeholder conflicts, inadequate team training, system outages, late suppliers, etc.
But not all risks are bad. Positive risks are a risk type that can leave a beneficial mark on a project and even help you reach your project goals. The best way to understand positive risks is to consider them as being too much of a good thing, like getting more orders than you can deliver with your current resources, receiving so many website visitors that the website temporarily crashes, or getting too many interview requests after a product launch that you can’t physically attend.
Assumptions are statements and situations related to a project’s progress that you assume are true without solid proof. You might expect new technology to be available in time, outsourced work will be cheaper during the next two months; all stakeholders will attend your last meeting, and so on.
Constraints refer to your limits regarding costs, time, quality, risk, scope, and resources. Having a constraint usually means you must schedule and execute work by keeping limits in mind. Say you must finish 20% of all tasks within the first week, or only one designer is available for a project when you’d need at least two.
Dependencies represent all the elements (projects and other operations) that influence a project’s schedule. These can also be part of your risk management plan if they threaten the project’s success. Some examples include a project’s start date depending on a previous project’s completion, a partnership influencing the existence of a project, a deliverable from a previous project being needed for this project to start, and more.
Project dependencies can also refer to the relationship between a project’s tasks. Establishing these will show the correct sequence in which you should complete them and whether a task depends on any resource. These dependencies, however, will be mentioned when you’re planning your project and not in the charter.
Tip: Include everything in your project charter that can negatively impact your project or delay its development. If you’ve left out any factor from this stage, you’re more likely to forget it even during planning and be unprepared to handle it when it matters.
7. Project Key Milestones
Your milestones contain your most meaningful events and the date when your project starts and when you should complete it.
As long as you’ve clearly stated this possibility in the project charter, missing a deadline is not something to worry too much about. Project delays are expected. This means that these milestones might not be your final dates. Just make sure they are justified.
Tip: A great tool for displaying milestones is the Gantt Chart. You can use this project management technique to plan tasks and keep track of their development, including the people responsible for them and their input. So, choose an easy Gantt chart builder for progress tracking.
Gantt Chart Example
Create your first Gantt Chart with a free Paymo trial.
8. Project Budget
For now, come up with a rough estimate of how much the entire project will cost. Include the price of your resources, team salaries, outsourced services, and other project-related expenses. You’ll go into more accurate details in your project management plan.
Tip: Use your previous projects and tasks as a benchmark to create these estimates – if they’re similar in structure. One way to do this is to track your time on your previous projects. And you can use that data to create time reports.
Note: If you can’t be bothered to deal with consultants, attorneys, and accounting companies, you could invest in a sturdy project management system. So, if you’re looking for a project management solution that includes core features like task management, team scheduling, timesheets, and invoicing, read our article on the best invoicing software that takes electronic systems to a new level, along with examples of good invoicing practices. If you need a free invoice generator that still stores invoices on the cloud, most invoice builders allow that.
Bonus: A communication method is also sometimes included in the project charter. This helps you identify precisely how you (as a project manager) will communicate with your team, stakeholders, and clients and when and how you’ll hold your meetings with them. Even if you won’t include this in the project charter, establishing a communication strategy is mandatory for the project management plan.
Project Charter Template
Here’s a light project charter template in Google Docs you can start with—go to “Files” > “Make a Copy.” Alternatively, you can download other project charter templates, either Excel or PDF files.
Use this project charter example as a reference, and feel free to add any other elements you might need to mention in your project.
Some of the other elements you might want to add to the project charter’s content are the publishing date, the charter’s version and its history (to include any changelogs), contact details, a communication strategy, or other attached documents
Where do you start when creating a project charter?
When creating your project charter, there’s existing information you already have, such as
- project justification (the “why” that includes the problem/issue you are solving)
- project background (context)
- project scope statement (focus)
- stakeholders
- steering committee
- deliverables
- assumptions
- constraints
- a tentative schedule
- budget and cost estimates
Next, you’ll have to gather the following information
- project risks (plus a contingency plan)
- project customer/client
- project team members
- roles & responsibilities
- key milestones
- a breakdown of budgets and costs
- key documents
- approvals (with signatures) from stakeholders or steering committee members
You can create a project charter in just three steps, provided that the effort and focus put into these stages are at their highest:
1. Hold a meeting with all project stakeholders
Never come up with the project charter alone. As a rule of thumb, write the project charter after an interactive meeting with key stakeholders, clients, and other team members.
Ensure that everyone participates and brings feedback, puts everything on paper, and further discusses conflicting opinions. Also, don’t miss any of the project charter elements listed above. This is your chance to get everyone on the same boat and prevent further misunderstandings.
Check out this PMI® article to see the importance of involving your team in creating the project charter.
2. Write and review your project charter
After the meeting, write the project charter and review its content. You can also show the project charter to the rest of the team members so they can review it.
Again, don’t forget to update it based on the team’s feedback.
3. Get approval for your project charter
Then, send the project charter to the key stakeholders and project sponsors so they can review it, make suggestions, and approve it so you can start working.
Keep the final document visible for all team members to use as a reference for their tasks to see their objectives, obstacles, and milestones.
Takeaway
However, writing the project charter requires motivation and an understanding of its purpose.
If you’re still not convinced about the importance of this document, keep in mind you’re not writing it just because you were told to. A project charter can help establish project member authorities, guide overall project development, and ease approval.
Putting together a project charter is only one of a project manager’s responsibilities. Check out our complete guide to them. Also, read more about PMI, different certifications, and the many methodologies of project management in this guide.
Also, if you wondered what a product owner is or if a product manager and project manager are in the same position, then read this article for beginners that outlines the necessary skill set, experience, and focus of the two.
If you found this helpful article, please spread the knowledge and share it with your teammates and followers.
Alexandra Cote
Author
Alexandra Cote is a SaaS content writer and strategist with a passion for workplace productivity, social media marketing wonders, conversion rate optimization, artificial intelligence, and keyword research. Reach out to her via LinkedIn.
