Guide: Project Charter

Welcome to the guide for creating a project charter. An essential document called a project charter serves as the cornerstone of effective project management. As a road map for the project’s execution, it outlines the goal, objectives, range, and important parameters. This guide will walk you through the process of creating an extensive project charter step by step. Each step will be thoroughly explained, giving you useful information and direction, starting with project definition and stakeholder analysis and ending with project governance and stakeholder approvals. Following this manual will give you the skills and knowledge you need to draft a solid project charter that will ensure the project’s success.

Table of Contents

Step 1: Define the Project

Clearly state the project’s goals and purpose: Start by stating why you are working on the project and what you hope to accomplish. This includes describing the goals, advantages, or advancements the project hopes to bring about.

Project Charter Template Problem Statement LearnLeanSigma

Identify the key stakeholders and their roles and responsibilities: Stakeholders are individuals or groups who have an interest or influence in the project. Determine all the pertinent internal and external stakeholders who will be affected by or have an impact on the project. Establish their responsibilities and roles in relation to the project, including those of sponsors, team members, clients, end users, regulatory bodies, etc.

Determine the project scope, including what is included and excluded: Set the project’s boundaries by describing what will be included in its scope and what will be excluded. By doing this, scope creep is prevented and clear expectations are set. When defining the scope, take the deliverables, goals, and restrictions into account.

Step 2: Conduct Stakeholder Analysis


List all the parties with an interest in the project: Make a thorough list of all the parties involved in the project, taking into account both individuals and groups that will be impacted by or have influence over it. This includes the project team, sponsors, clients, vendors, end users, management, and other pertinent parties.

Assess their level of influence, interest, and potential impact on the project: Examine each stakeholder’s potential impact on the project’s success as well as their level of involvement and influence over the project. This evaluation aids in prioritizing stakeholder engagement and gaining an understanding of their requirements, issues, and expectations.

Identify the approaches to managing stakeholders and resolving their issues: Create strategies to successfully engage and manage stakeholders throughout the project based on the stakeholder analysis. Plans for communication, regular meetings, including stakeholders in decision-making processes, and promptly responding to their concerns or issues are a few examples of how to do this. It’s crucial to keep lines of communication open and cultivate a positive rapport with all parties involved.

By finishing these preliminary steps, you create a strong framework for the project charter. A successful project depends on the project team and stakeholders having a clear understanding of the project’s purpose, objectives, stakeholders, and scope.

Step 3: Develop the Project Scope

Define the boundaries and deliverables of the project: Clearly define the boundaries of the project by identifying what is included and excluded. This helps avoid scope creep and establish reasonable expectations. Indicate the main outputs or deliverables that the project will produce, making sure they are in line with the project goals.

List the important deadlines and milestones: Break the project down into major milestones, which are significant junctures in the project’s development or accomplishments. The project’s progress can be monitored and tracked using these milestones as reference points. Determine the key deliverables for each milestone as well, which are the essential outputs that must be produced, whether they be measurable or not.

Gantt Chart

Establish any assumptions and constraints that may affect the project scope: Conditions or elements that are assumed to be true but have not yet been verified are known as assumptions. Any assumptions underlying the project’s scope should be identified, along with their potential effects. Contrarily, constraints are limits or restrictions that may have an impact on how the project is carried out. Any assumptions and restrictions must be documented in order for them to be taken into account throughout the project.

Step 4: Create a Project Schedule

Describe the major phases and timeline for the project: Establish the project’s overall schedule, including the start and end dates. Divide the project into significant stages or phases that logically order the work. Each phase represents a different time in the project and has its own set of tasks and goals.

Divide the project up into more manageable tasks and activities: To achieve the project deliverables, break down each project phase into smaller tasks and activities. These assignments ought to be SMART goals—specific, measurable, achievable, relevant, and time-bound. Make sure the task breakdown is thorough and includes all necessary activities.

Determine the length and dependencies of each task: Determine the amount of time needed to finish each activity or task. Take into account variables that may affect task durations, such as resource availability, skill levels, and potential risks. Determine task dependencies as well, that is, tasks that must be finished sequentially or concurrently. Making an accurate project schedule is made easier by understanding task dependencies.

By developing a clear project scope and creating a detailed project schedule, you establish a roadmap for the project. A shared understanding between the project team and stakeholders is ensured by clearly defining the project’s boundaries, deliverables, milestones, and key assumptions. Effective project planning and resource allocation are made possible by breaking the project down into smaller tasks and estimating their times to complete and dependencies.

Step 5: Identify Project Resources

Determine the resources required for the project, such as personnel, equipment, and budget: Determine the precise resources that will be required to finish the project successfully. This includes both physical and financial resources, such as equipment and facilities, as well as human resources, such as project team members and subject matter experts. Take into account both the organization’s internal resources as well as any potential external resources that may need to be acquired.

Assess the availability and potential limitations of these resources: Analyze the accessibility of the identified resources and any conceivable restrictions or limitations that might have an effect on it. Take into account elements like resource availability over the course of the project, competing resource demands from other projects or operational activities, and any reliance on outside vendors or suppliers.

Develop a resource allocation plan: Based on the identified resources and their availability, create a resource allocation plan that outlines how the resources will be allocated and utilized throughout the project. Assign roles and responsibilities to team members, specify the tools or equipment needed, and decide on the project’s budget. The resource allocation plan makes sure that resources are used efficiently to complete projects.

Step 6: Define Project Risks

Identify potential risks and uncertainties that may affect the project: By identifying potential risks that might have an impact on the project’s goals, schedule, budget, quality, or stakeholder satisfaction, conduct a thorough risk assessment. Risks can come from a variety of sources, including organizational, environmental, technical, and external factors. Think about all the dangers that might jeopardize the project’s success.

Assess the likelihood and impact of each risk: Analyze each identified risk in terms of its likelihood of occurrence and its potential impact on the project. Analyze the risk’s likelihood of occurring and the seriousness of its repercussions. As a result, risks can be prioritized and the proper resources can be allocated for risk management activities.

Create a risk mitigation strategy to lessen the impact: Once risks have been identified and evaluated, create a strategy to proactively address and lessen their impact. Each identified risk should be addressed in the plan with specific mitigation, avoidance, transfer, or acceptance strategies and actions. Establish contingency plans, assign roles for risk management activities, and specify triggers and thresholds for risk response measures.

You can make sure that the necessary resources are available and used efficiently throughout the project by identifying project resources and creating an allocation plan for those resources. Project success is increased by being aware of and addressing project risks through risk identification, assessment, and mitigation planning. These actions assist in proactive project management and lessen resource-related risks and challenges.

Step 7: Establish Project Governance

Determine the project organization structure and roles: Define the project organization structure by identifying the key roles and responsibilities within the project team. This entails identifying the team leads, project manager, and other team members. Clarify the project team’s overall hierarchy, decision-making processes, and reporting lines.

Describe the procedures for escalation and decision-making: Clearly define the project’s decision-making policies. Establish the process for making decisions, who has the power to do so, and how they will be communicated. Establish escalation procedures as well for handling disagreements and problems that the project team cannot resolve at lower levels.

Specify the channels for communication and reporting: Specify the channels for communication and the protocols that will be followed throughout the project. Indicate who needs to be informed, how information will be shared, and how often communications will occur. Establish the reporting procedures that will be used to update stakeholders on the project’s status, such as progress reports, status conferences, or dashboards.

Step 8: Develop a Project Budget

Estimate the costs associated with the project, including labor, materials, and other expenses: Determine each expense related to the project and estimate it. Costs for team members’ labor, materials, tools, software licenses, training, travel, and any other project-related costs are included in this. To get precise cost estimates, collaborate closely with the pertinent stakeholders and subject-matter experts.

Calculate the overall project budget: Add the estimated costs to get the budget for the entire project. Take into account any budgetary or financial restrictions that might have an impact on the project. Make sure the budget is realistic and attainable and that it is in line with the project’s goals.

Specify the monitoring and financial controls: Create financial controls to keep an eye on and track project costs. This could entail implementing approval procedures for expenditures, setting up mechanisms to monitor actual spending against the budget, and carrying out routine financial reviews. Define the procedures for gathering, keeping track of, and reporting financial data during the project’s entire lifecycle.

Effective project management depends on establishing project governance and creating a project budget. Setting up a clear project organization structure and decision-making procedures aids in ensuring effective teamwork and accountability. A thorough project budget can be created to enable accurate cost estimation, financial planning, and expense monitoring, which improves financial control and resource allocation.

Step 9: Obtain Stakeholder Approvals

Share the draft project charter with the important parties: As soon as the project charter has been created, it should be distributed to the important parties, such as the project sponsors, senior management, and other pertinent parties. This enables them to examine the charter and offer feedback on it.

Ask for their input and make any necessary changes in response: Encourage participants to read the project charter and offer their feedback. To ensure that the project’s goals, scope, and essential elements are accurately reflected in the charter, take into account their suggestions and make the necessary revisions. The expectations of all stakeholders are aligned and their support is gained through this collaborative process.

Obtain official approvals and sign off on the project charter: After the necessary revisions have been made, ask the important stakeholders for official approval. Obtaining their signatures or other official signs of approval may be necessary for this. A formal sign-off demonstrates the stakeholders’ support for the project and establishes a clear direction for its execution.

Step10: Communicate and Distribute the Charter

Distribute the approved project charter to all stakeholders: Once the project charter has been approved, ensure it is widely distributed to all relevant stakeholders. This includes everyone who will be involved in or impacted by the project, including the project team members, sponsors, and key stakeholders. The charter will be distributed to ensure that everyone has access to it and is aware of its contents.

Ensure that the document is accessible to all project participants: Make sure the approved project charter is available to the entire project team and all stakeholders. Project management tools, collaborative document repositories, or any other appropriate distribution method can be used to accomplish this. Ensure that the charter is easily accessible for use as a reference throughout the course of the project.

Refer to the project charter as a resource at all times: The project charter serves as a roadmap for the project. To make sure the project stays in line with its goals, scope, and important parameters, encourage the project team and stakeholders to frequently refer to the charter. The charter serves as a point of reference for everyone involved and aids in preserving consistency and focus throughout the project.

The success of the project depends on getting stakeholder approval and effectively communicating the project charter. You can increase stakeholders’ engagement and make sure that their opinions and expectations are taken into account by including them in the approval process. The project charter should be disseminated and used as a guide throughout the project’s lifespan to help with alignment, communication, and to provide a clear framework for decision-making.


In conclusion, establishing a project charter is a crucial first step in effective project management. You can create a thorough and well-defined project charter that establishes clear expectations, unites stakeholders, and creates a strong foundation for the accomplishment of your project by following the step-by-step instructions provided here.

We have emphasized the significance of defining the project’s purpose, objectives, and scope throughout this guide. We have also stressed the importance of conducting stakeholder analysis to identify key stakeholders and their roles. The importance of creating a project schedule, identifying resources, controlling risks, and establishing efficient project governance has been discussed.

Stakeholder approvals and clear project communication make sure that everyone working on the project is on the same page and aware of its goals, parameters, and scope. Throughout the course of the project, the project charter acts as a constant point of reference, assisting in decision-making, fostering effective communication, and maintaining project focus.

Keep in mind that the project charter is not just a document to be written down and then lost. It should be reviewed and used as a guide throughout the project to allow for course corrections, accommodate alterations in the situation, and guarantee that the project stays on track.


Additional Useful Information on Project Charter

The Often-Overlooked Sections

  1. Constraints and Assumptions: Apart from the usual sections, such as objectives and scope, the Project Charter should also detail any constraints and assumptions. These often-overlooked sections can affect the project’s outcome significantly.

  2. Key Performance Indicators (KPIs): Setting measurable KPIs can be a valuable addition to the Project Charter as it provides a framework for evaluating the project’s success.

Extensions and Variations

  • Mini-Charter: For smaller projects, a simplified version known as a Mini-Charter might suffice. It contains only essential information like objectives, scope, and key stakeholders.

  • Project Charter in Agile: In Agile methodologies, the Project Charter takes on a more flexible form, often seen as a living document that evolves with the project.

Digital Platforms and Tools

With the increasing complexity and interdepartmental nature of projects, utilizing digital platforms to create, modify, and share your Project Charter can be invaluable. These platforms can offer templates, collaboration features, and even integrate with other project management tools.

Integration with Other Tools

  1. RACI Matrix: A RACI matrix (Responsible, Accountable, Consulted, Informed) can be appended to or integrated with the Project Charter to clarify roles and responsibilities.

  2. SWOT Analysis: Including a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) can provide a comprehensive view of the internal and external factors that might affect the project.

How it Ties into Lean Six Sigma

In Lean Six Sigma, the Project Charter is often developed during the Define phase of the DMAIC cycle. It helps in aligning the team and stakeholders to the project’s objectives and sets the stage for subsequent phases of the project.

A: A project charter is a formal document that provides an overview of a project’s objectives, scope, deliverables, stakeholders, and key constraints. It serves as a foundation for the project and defines its authority and boundaries.

A: The project charter plays a crucial role in project management as it establishes the project’s purpose, clarifies expectations, and defines the project’s high-level requirements. It helps align stakeholders, secure resources, and serves as a reference point throughout the project’s lifecycle.

A: The key components of a project charter typically include the project’s title and description, objectives and success criteria, scope statement, deliverables, stakeholders and their roles, project risks and constraints, high-level schedule, and approval requirements.

A: The project charter is typically created by the project sponsor or initiator, in collaboration with the project manager and other key stakeholders. The charter should be reviewed and approved by relevant parties before the project commences.

A: A project charter and a project plan serve different purposes. A project charter outlines the project’s high-level objectives, scope, and stakeholders, while a project plan is a detailed document that includes specific tasks, timelines, resources, and dependencies needed to accomplish those objectives.

A: Yes, a project charter can be changed if there is a valid reason to do so. However, any changes to the project charter should follow a formal change management process and be approved by the relevant stakeholders to ensure transparency and alignment.

A: While the level of formality may vary, it is generally recommended to have a project charter for most projects, particularly those that are complex, have a significant impact on the organization, involve multiple stakeholders, or require considerable resources. However, the size and complexity of the project should dictate the level of detail in the charter.

A: Ideally, a project should not start without a project charter. The charter helps establish the project’s direction, define its goals and scope, and gain the necessary support and commitment from stakeholders. Starting a project without a charter can lead to ambiguity, misalignment, and increased risk.

A: The length of a project charter can vary depending on the project’s complexity and organizational requirements. In general, a project charter is a concise document that ranges from a few pages to a maximum of 10-15 pages. It should provide enough information to communicate the project’s essential elements without overwhelming readers with unnecessary details.

A: While the project charter is typically created at the beginning of a project, it can still be referenced and updated throughout the project’s lifecycle. The charter serves as a reference point for decision-making, provides context to stakeholders, and helps maintain project alignment as circumstances may change.


Daniel Croft

Daniel Croft

Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website, a platform dedicated to Lean Six Sigma and process improvement insights.

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