What is Project Charter or Business Plan?

Project Charter

The Project Charter is a formal document issued at the very beginning of a project (during the Initiation phase).

• Purpose: To formally authorize the existence of the project and give the Project Manager the authority to use organizational resources for project activities.

• Focus: High-level summary that defines what the project is, why it's being done (briefly tying it to business needs), who the key stakeholders are, and what success looks like (high-level scope/objectives).

• Audience: Project Sponsor, Project Manager, and key stakeholders who need to formally approve the project to start.

• Key Deliverable: It is the official "green light" to proceed with the Planning phase.

 Business Plan (or Business Case)

The term Business Plan is generally broader, referring to the strategic document for an entire business or major new venture. However, in the context of a specific project, people often refer to the Business Case, which is closely related to the Charter's justification.

• Purpose: To justify why a project should be undertaken from a business perspective. It makes the investment argument.

• Focus: Detailed analysis of the business need, expected benefits, costs, risks, and return on investment (ROI). It answers the question: "Should we do this project?"

• Audience: Senior management, executives, or investors who control funding and strategic direction.

• Key Deliverable: It is an input to the Project Charter; the Project Charter is created after the Business Case proves the project is worthwhile.

Feature	Project Charter	Business Plan / Business Case
Primary Question	How will we execute this approved project?	Should we do this project?
When Created	After the initial justification is accepted (Initiation Phase).	Before the project is formally authorized (Pre-Initiation/Feasibility).
Primary Role	Authorizes the project and the PM's authority.	This justifies the project's investment and value.
Level of Detail	High-level scope, objectives, and authority.	Detailed financial analysis, market need, and expected ROI.