Because no one can read your mind (yet)
A README is a text file that introduces and explains a project. It contains information that is commonly required to understand what the project is about.
It's an easy way to answer questions that your audience will likely have regarding how to install and use your project and also how to collaborate with you.
Anyone who is working on a programming project, especially if you want others to use it or contribute.
Definitely before you show a project to other people or make it public. You might want to get into the habit of making it the first file you create in a new project.
In the top level directory of the project. This is where someone who is new to your project will start out. Code hosting services such as GitHub, Bitbucket, and GitLab will also look for your README and display it along with the list of files and directories in your project.
While READMEs can be written in any text file format, the most common one that is used nowadays is Markdown. It allows you to add some lightweight formatting. You can learn more about it here, which also has a helpful reference guide and an interactive tutorial. Some other formats that you might see are plain text, reStructuredText (common in Python projects), and Textile.
Every project is different, so consider which of these sections apply to yours. The sections used in the template are suggestions for most open source projects. Also keep in mind that while a README can be too long and detailed, too long is better than too short. If you think your README is too long, consider utilizing another form of documentation rather than cutting out information.
Choose a self-explaining name for your project.
Let people know what your project can do specifically. Provide context and add a link to any reference visitors might be unfamiliar with. A list of Features or a Background subsection can also be added here. If there are alternatives to your project, this is a good place to list differentiating factors.
On some READMEs, you may see small images that convey metadata, such as whether or not all the tests are passing for the project. You can use Shields to add some to your README. Many services also have instructions for adding a badge.
Depending on what you are making, it can be a good idea to include screenshots or even a video (you'll frequently see GIFs rather than actual videos). Tools like ttygif can help, but check out Asciinema for a more sophisticated method.
Within a particular ecosystem, there may be a common way of installing things, such as using Yarn, NuGet, or Homebrew. However, consider the possibility that whoever is reading your README is a novice and would like more guidance. Listing specific steps helps remove ambiguity and gets people to using your project as quickly as possible. If it only runs in a specific context like a particular programming language version or operating system or has dependencies that have to be installed manually, also add a Requirements subsection.
Use examples liberally, and show the expected output if you can. It's helpful to have inline the smallest example of usage that you can demonstrate, while providing links to more sophisticated examples if they are too long to reasonably include in the README.
Tell people where they can go to for help. It can be any combination of an issue tracker, a chat room, an email address, etc.
If you have ideas for releases in the future, it is a good idea to list them in the README.
State if you are open to contributions and what your requirements are for accepting them.
For people who want to make changes to your project, it's helpful to have some documentation on how to get started. Perhaps there is a script that they should run or some environment variables that they need to set. Make these steps explicit. These instructions could also be useful to your future self.
You can also document commands to lint the code or run tests. These steps help to ensure high code quality and reduce the likelihood that the changes inadvertently break something. Having instructions for running tests is especially helpful if it requires external setup, such as starting a Selenium server for testing in a browser.
Show your appreciation to those who have contributed to the project.
For open source projects, say how it is licensed.
If you have run out of energy or time for your project, put a note at the top of the README saying that development has slowed down or stopped completely. Someone may choose to fork your project or volunteer to step in as a maintainer or owner, allowing your project to keep going. You can also make an explicit request for maintainers.
A README is a crucial but basic way of documenting your project. While every project should at least have a README, more involved ones can also benefit from a wiki or a dedicated documentation website. GitHub, Bitbucket, and GitLab all support maintaining a wiki alongside your project, and here are some tools and services that can help you generate a documentation website:
Just having a "Contributing" section in your README is a good start.
Another approach is to split off your guidelines into their own file
CONTRIBUTING.md). If you use GitHub and have this file,
then anyone who creates an issue or opens a pull request
will get a link
You can also create an issue template and a pull request template. These files give your users and collaborators templates to fill in with the information that you'll need to properly respond. This helps to avoid situations like getting very vague issues. Both GitHub and GitLab will use the templates automatically.