Managing a project from start to finish is anything but easy. You need to plan every step of the process, set realistic objectives and anticipate any challenges that may arise_._ A lack of clear goals is the primary reason most projects fail. Before getting started, make sure you understand the role of a project charter in project management and why it's crucial to your success.

Tip

The project charter should be about five to six pages long and cover the key aspects of a project, from its scope and goals to the costs involved.

Project Charter Definition

A project charter outlines the key aspects of your project, including its general scope, goals, milestones, budget and participants. This document is created at the start of a project and its role is to define its purpose and requirements. It also acts as an agreement between the project manager, key stakeholders and sponsors, listing their primary roles and responsibilities.

Project charter elements may include a short description of the project and its organizational structure as well as any risks and constraints. In general, the information is presented briefly. Think of it as a road map that outlines where you're going, what your goals are, who is going to help you and what resources you need to reach your destination.

As a business owner or project manager, you must define these steps early in the project lifestyle. This document helps ensure that everyone is on the same page and shares a common vision. When done right, it can prevent miscommunication and misunderstanding, keep the team organized and provide a clear reporting system.

Components of a Project Charter

There are no set rules for drafting a project charter. You can include as little or as much information as you wish. However, it's recommended to keep it short and concise. Project charter elements may include some or all of the following:

  • Project purpose
  • Description
  • Short- and long-term goals
  • General scope
  • Milestones
  • Deliverables
  • Stakeholder list
  • Roles and responsibilities
  • Potential risks
  • Assumptions and constraints
  • Key performance indicators
  • Budget outline
  • Standards and methodologies
  • Project approval requirements

Some organizations cover all of these factors when creating a project charter. Others focus on the key aspects without going into details. At the very least, this document should include a scope statement, a business case, project objectives and deliverables, team structure, requirements and preliminary estimates.

When you draft the project charter, emphasize the return on investment. Be clear about how the project will benefit your business and why it matters for the company's bottom line. This is the first thing sponsors and stakeholders will see. Show them exactly what they get for the time and money they're spending.

Why Create a Project Charter?

Any project regardless of its size takes time and work. It also requires careful planning at every step of the process. The project charter outlines the steps needed to bring your vision to life. This document recognizes the existence of your project, states its objectives and defines its start date. At the same time, it allows you to allocate resources more effectively and helps prevent disagreements among stakeholders.

This tool supports the decision-making process and ensures that your project aligns with the company's goals. Furthermore, it authorizes the project manager to procure resources and spend money. By drafting a project charter, you'll be able to identify any potential risks and drawbacks ahead of time. This can help you plan things out and avoid costly mistakes down the road.

The project charter can also serve as a reference for your team later on. You may use this document during meetings to remind stakeholders of the project's benefits and goals. This document also makes it easier to create a budget and come up with a rough estimate of how much the project will cost. At the end of the day, it can help you mitigate risks and provide a solid foundation for making informed decisions.