If you are an entrepreneur, then working on different projects is a routine thing for you. The real challenge is to complete each project with maximum efficiency. That’s because your project’s success will always define your future hiring potential. 

Successful projects act as a doorway to more incredible projects and business accomplishments. That’s why it’s crucial to devise a project charter that acts as the foundation for the efficient completion of every project. 

To help you out, we’ve prepared this quick guide on how to make a good project charter.

The Importance of Project Charters

A project charter is an important project planning tool. But why do you need to create one? 

Like all things in life, proper planning in businesses makes things more organized and streamlined. That said, a properly crafted project charter is essential for businesses as:

• It saves companies from project failures.
• It improves team management and communication. 
• It provides a framework of how to process a project.
• Tracking goals is easier when you have a proper plan. 
• It allows a more equal distribution of workload to every employee.
• It improves the team’s overall performance, and the chance of success increases.

The Essential Components of a Project Charter

When creating a project charter, knowing about the essential components of project planning is important, as it makes the process much easier. With that, the main components required in a project charter are: 

Project Definition

Establishing a project definition is a critical factor in creating a project charter. It initiates the project management process. 

Make sure that your project definition is clear. In addition, you should have proper knowledge and tools for what you are asked to create. 

Scope

Having a document that encapsulates the scope of your project is necessary to ensure its success. It also acts as a reference when making agreements with external parties. A project scope statement includes all requirements, steps, and details about a specific project. 

Schedule

After creating a project definition and scope statement, your next step is to schedule everything thoroughly. This helps you regularly keep track of each work package’s progress.

To create a project schedule, you need to:

1. estimate the time the project team will need to complete a particular project;
2. divide the overall scope into manageable work packages and assign an owner for each package;
3. set and align reasonable deadlines and reporting cycles so that everyone delivers their work on time.

Execution Strategy

An execution strategy is your approach to how and when to execute each key work package or deliverable to complete the project. This is why project leaders should plan an execution strategy thoroughly. 

Keep in mind the following points to devise an effective execution strategy:

• Know your final goal and develop a strategy that is aligned with that goal.
• Include your team and ask for their ideas while creating an execution strategy. 
• Act like a true leader and choose the ideas that benefit the project and your organization the most. 
• Build a team with experienced, high-quality, and efficient workers to help you complete a project successfully. 
• Manage your team’s performance. 

RACI Chart

RACI stands for Responsible, Accountable, Consulted, and Informed. A RACI chart is a highly used method in project management to divide roles and responsibilities among all project team members. This helps reduce the amount of confusion that can arise, especially during project initiation. It also encourages team members and helps in effective task management.

Budgets and Resources

To correctly estimate the project budget, one should know or thoroughly assess the material, time, and money required to complete that project. Then, track your budget and be very detailed by listing and tracking every potential cost driver. This can include human resource costs, freelancer fees, materials, software, licenses, etc.

It’s a good practice to create different scenarios based on the initially estimated budget based on assumptions. With this, you can come up with a worst/medium/best-case scenario. You can then use those scenarios to communicate a project budget ranging from x to y instead of one number that will change constantly.

A thorough estimate of the project budget, paired with scenario planning, should equip you to get the green light from the project steering committee for the requested project budget.

Risk Management Strategy

When making a project plan, it’s crucial to analyze the risks involved. Doing so can help you manage them better by devising mitigation strategies ahead of time. This, in turn, increases the chances of successful project completion.

This is also why companies should always have a backup plan or risk management strategy in case significant issues surface during the project execution. It also helps project managers quickly communicate the protocols to follow when something unexpected happens. This way, the project team members won’t panic, and the issue at hand can be managed more smoothly.

Reporting Schedule

Meeting deadlines is an essential factor in project management. After creating a proper project plan, you should be able to identify the ideal reporting time for each task. This reporting schedule motivates the team and helps to complete the project within the set deadline. 

In addition, it’s always recommended to include a bit of buffer for each main project phase to deal with uncertainty. Ideally, a week or two would be enough, depending on the overall project duration.

How to Create a Project Charter

As you can see, a project charter is an essential first step to ensure you fully understand the project and create the actual project plan. You can quickly generate a good quality project charter just by considering these seven simple steps: 

1. Identify and Consult with Stakeholders

A stakeholder is considered anyone who gets directly affected by the good or bad outcomes of a specific project. Knowing what your stakeholders (customers and consumers) want and expect makes it easier to plan a project. As such, identifying and meeting with stakeholders is the first step to creating a proper project charter. 

Pro tip: always try to give a little more than what your stakeholders demand. It helps improve the relationship between them and your brand. 

2. Define Project Goals, Scope, and Timeline

Once you are done finding and meeting your stakeholders, the next step is defining the project. During this, you set and prioritize specific project goals while keeping in mind the interests of your stakeholders.

You prioritize those project objectives through which you can provide the best value to your stakeholders. Try to write down every demand addressed by stakeholders clearly, so you can easily share it with your team members. It’s also a good idea to rank each written goal according to its importance and delivery time.

3. Define Deliverables

A deliverable is an outcome element that is mentioned within the project scope statement. It is slightly different than the project objective. A deliverable is an actual item made for project advancement. An objective, on the other hand, is the project’s final goal. 

Identifying and defining these deliverables is essential to know the specific outcomes that are expected of the project. Once you have identified the deliverables, establish the deadlines to meet each deliverable within the project schedule. You can also talk to experts within your project team to make a sound timeline estimate where required.

4. Define Roles and Responsibilities

The fourth step is the division and allocation of work between project team members and the project manager. For this, you can start with writing all work packages that need to be completed along with their estimated due dates. After that, allocate them according to each team member’s skills and efficiency level.

Hand over the most significant tasks to the most experienced team members so you can get optimum results. Also, make sure that every team member clearly understands what tasks they need to perform.

5. Assess Risks

Projects are risky by nature. To prevent massive failures, loopholes and risks already known at the beginning should be assessed and ideally addressed before the project execution even starts.

Ideally, you should try to complete high-risk tasks earlier. Furthermore, conducting a risk assessment is necessary for developing efficient risk management strategies, as mentioned above. 

6. Write the Project Charter

Now that you have all the necessary information about how to execute your project, it’s time to put together your project charter.

Start by listing all deliverables and work packages, and then define the tasks that need to be accomplished within each deliverable. Then, divide the time and resources among each deliverable according to the number of tasks. Don’t forget to record all the details thoroughly. 

Sort your deliverables based on urgency and logical sequence. Then highlight crucial dependencies between different work pages or tasks. 

Involving the project team members during the project plan creation will also help generate buy-in and improve team morale in the long run. 

7. Communicate the Project Charter

Finally, your project won’t be of any use if your stakeholders don’t know about it. That’s why creating a project charter doesn’t end when you finish writing it. You still need to present it to your stakeholders.

Prepare a detailed explanation of how your offered project will solve stakeholders’ problems and how they will get the most benefit from it. Your presentation should be like an open discussion rather than a one-sided briefing of ideas. Allow stakeholders to share their thoughts and address them properly. 

Lastly, ensure that all your project documents are accessible to the project stakeholders. 

Project Planning Tips

Following these project planning tips can help you devise a successful and effective project plan. 

1. Keep it simple

When making a project plan, a simple, straightforward one is usually better than an overly detailed plan. That’s because overplanning can ruin a project and often results in a jumble of confusing ideas. To avoid this, your project plan should be in a single document that is easy to read and use. 

2. Set Attainable and Measurable Goals

Setting attainable and measurable goals is vital in completing a project successfully. That’s because unattainable goals often lead to stress, exhaustion, and project failures.

Project managers and business owners can consider the following factors to ensure that they are setting an attainable goal:

• See if you have enough resources, and then plan accordingly.
• Estimate your minimum and maximum budget before finalizing project goals.
• Look for the number of workers you need and ensure they are available for the set project start.

3. Set a Realistic Budget

Project managers should set a realistic budget as it helps to complete a project successfully. For realistic project budgeting, consider the following steps:

• Start by breaking down the entire project into small tasks with milestones.
• Estimate the budget for each task.
• Add all estimates and calculate the final estimate.
• Add tax rates in that estimate if required.
• Lastly, check with the finance team if your final estimate, after tax, corresponds to the investment your organization is willing to make.

Key Takeaways

Project planning is a crucial part of project management in any company. It requires an in-depth understanding of the project to develop a failproof project charter. Also, proper and early project planning saves companies from substantial losses due to project failures.

In short, crafting a project charter not only helps a business meet project deadlines and manage risks. It also significantly increases the chances of a project’s success. All of which ultimately contribute to business growth.