What is a Project Charter and Why It is Important [Beginners Guide]

project chater

Businesses earlier could have operated without defining the scope or questioning the undertaking of certain projects but now there is no room for no questions asked.

Now, a smarter approach adopted by businesses is to clearly define scope, goals and steps before taking up any project. That is exactly where a Project Charter comes in handy.

If you are new to this subject, stay hooked to this blog as we will tell you everything that you need to know about a Project Charter. 

What is a Project Charter?

What is a Project Charter

Charters are nothing but important authorized documents for projects that your business plans on taking up. 

Like we mentioned earlier, a Project Charter is a defined statement that is inclusive of certain important aspects such as the scope of the project, the purpose of undertaking it, the team that is going to be involved in the whole process.

PC is an underestimated tool that can really help in the successful completion of a project within the project timeline by giving it a defined direction.

What are the Key Elements of a Project Charter? 

Key Elements of a Project Charter

The project Charter can be specifically divided into 2 phases — The Initiation Phase which marks the charter when it is proposed and before it is accepted and the Planning Phase, which is once it is accepted. Some of the key elements lay the foundation of these phases.

The core elements of the PC during its Initiation phase are:

  • Well defined Scope of the proposed project 
  • The ultimate objective of the project 
  • The overall criteria for the project to get accepted

The core elements of the PC that get added to the Planning phase are:

  • Setting the targets to hit during the timeline and adding Guidelines 
  • Defining the process & Delegating roles and responsibilities, while defining it all clearly
  • Setting a budget and a plan to allocating it to the resources 
  • Studying the risks involved and having proposed backup plans for mitigating those risks 
  • Defining factors that will help measure the success of the project

All these elements that are added to the project charter cater to the objective of the project charter — which is to have  100 % clarity while the project would be in its operational phase.

Why is it important to have a Project Charter in place?

A project charter is a foundational pillar on which the success of your project is dependent. Before you work on one, it is essential for you to know the importance that it holds. 

1. It Adds Value and Saves Up Crucial Time 

A project charter has defined goals and missions to accomplish. When the team members are working without it, they’re only focusing on the completion aspect of it but with PC, they’re constantly working on completing the work to meet goals and objectives while understanding the essence of it.

In addition, a PC ensures that the team knows well in advance what each member is up to and is well aware of the progress, therefore saving on time that would have otherwise been wasted. 

2. It Adds Much Needed Clarity 

A business often faces problems when the process is not envisioned in advance — tasks are not allocated according to each and everyone’s specialization, budget is not well thought of and potential risks and mitigating plans are not worked upon.

The bottlenecks then faced due to these problems then ultimately lead to project failure.

A PC adds clarity on all these aspects and makes sure the team is well-educated and trained in crucial matters. This ensures successful completion of the project and meeting goals. 

3. Brings in Discipline and sets out a Rough Deadline

Rough Deadline

Despite the fact that the project workflow can be adjusted and is flexible to work with, a Project Charter creates a timeline that the team is supposed to stick to. 

Not only does that ensure that the team works well within the project timelines but also ensures that each and every project milestone is met. It brings a certain decorum in the operations of the team which also increases productivity and efficiency of the team.

How to Prepare an Effective Project Charter?

There’s no perfect rule to write a winning project charter but there are ways that you can create a useful and effective project charter. 

1. Discuss with every party involved in the Project 

Yes, a discussion that includes team members, managers and even the stakeholders —After all, they’re the ones putting their efforts and money in.

Get everyone on board and have a mutual discussion as to what everyone’s take is on the project, value every person’s opinions and encourage participation. Such a discussion would boost the team’s morale and would bring in the trust needed by the members to actually want to move in the direction of achieving the goals of the project. 

2. Documentation is the Key 

Documentation is the Key

Don’t forget to take notes during the discussion as it is a valued resource that is going to help you plan your actionable steps for the project. Commence with the primary objective and gradually move down to the minute details that you should add to your document. 

3. Templates Come in Handy

Yes, make it easy yet useful for yourself. 

The internet is flooded with various templates that you can use for your project charter. It’s time to pick one as per your needs and get started on it.  This would also help you save on time and focus more on strategizing. 

4. Include Specific Detailed Information Such as the Scope, Objective and the Risks Associated

Now’s the time to define the scope of the project – what all is needed to be put in and what is the expected result.

Be as precise as possible and include answers to all the questions one can think of. Some of the questions that should be answered could be:

  • For the operations, is there a need for a new system or an ongoing one would suffice?
  • The completion date of the project?
  • Do the team members require training on any new software being deployed?
  • Who is going to be the target audience and what would be the Plan of Action?

And the list would go on…

A great project charter not only involves the positives of the project but also highlights areas that need more attention. Apart from the scope and the objectives, it is extremely essential to pay attention to the risks associated with the process and to come up with risk-mitigating plans well in advance.

5. Do Not forget to Review 

Once you have the final draft, review the whole plan with all of your team members and ensure everything is in place and is set just as per the plan. 

6. Go on and Present the Project Charter For Approval

Your Project Charter has not yet received the green light for taking on the project but is a key to that. Instead of sending a common PDF file for everyone to understand, it’s better than the project charter is discussed in detail and is explained well by the project leader. Any queries or doubts be taken care of to finally get the green light.


Voila, you know everything you should know about a Project Charter.

So, if you’re ready to commence your journey with a project management software with a built-in project charter, you should check out PeppyBiz Project Management Software today. 

Sara is a Content Writer at PeppyBiz. She is not only a creative writer but also paints a beautiful canvas. She makes sure that you are left with no doubt about keeping up with marketing and sales.

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