Scenario Planning

Scenario Planning

Build and compare multiple financial scenarios — best case, base case, and worst case. Run sensitivity analyses on key drivers, define trigger events that signal a scenario shift, and prepare contingency plans. Goal: the company is never surprised by the future because you've already modeled the possibilities.

Purpose

Startups operate in extreme uncertainty — one key customer loss, a fundraising freeze, or an unexpected growth spike can change the trajectory overnight. This skill prepares the company for multiple futures by modeling scenarios, identifying what would trigger a shift, and pre-building contingency plans so decisions are made calmly in advance rather than frantically in a crisis.

When to Use

• "Run scenario planning for next year"
• "Model best case / worst case / base case"
• "What if revenue drops 20%?"
• "Sensitivity analysis on growth rate"
• "When should we switch to our contingency plan?"
• "How much runway does each scenario give us?"

Inputs Required

1. Base case model — the "most likely" forecast from revenue-forecasting and budget-creation-management.
2. Key drivers — revenue growth rate, churn rate, hiring velocity, gross margin, sales efficiency.
3. External factors — market conditions, competitive dynamics, regulatory changes.
4. Cost structure — fixed vs variable cost split, to understand what flexes and what doesn't.

Quick Reference

| Scenario | Probability | Revenue vs Plan | Costs vs Plan | Focus | |----------|-------------|-----------------|---------------|-------| | Upside | 20% | +20-30% | +10-15% | Can we capture demand? | | Base | 55% | Plan | Plan | Business as expected | | Downside | 25% | −20-50% | −5-20% (flex only) | Can we survive? |

| Contingency Level | Reduction | Actions | |-------------------|-----------|---------| | Level 1: Trim | 5-10% | Pause hiring, cut events, renegotiate SaaS | | Level 2: Reduce | 10-20% | Hiring freeze, marketing cuts, contractor reduction | | Level 3: Survive | 20-30% | Layoffs, program cancellations, salary cuts |

Procedure

1. Define the Three Core Scenarios

| Scenario | Probability | Revenue | Costs | When it Applies | |---|---|---|---|---| | Base case | 55% | Plan | Plan | Business as expected | | Upside case | 20% | +20–30% vs plan | +10–15% (mostly variable) | Key deals close faster, product goes viral, market tailwind | | Downside case | 25% | −20–50% vs plan | −5–20% (only variable/flex costs) | Recession, competitor launch, key customer loss, funding market freeze |

2. Identify Key Drivers to Vary

| Driver | Base Case | Upside | Downside | Impact | |---|---|---|---|---| | Revenue growth rate | 10% MoM | 12% MoM | 5% MoM | High | | Gross margin | 80% | 82% | 75% | Medium | | Sales rep ramp time | 6 months | 4 months | 9 months | High | | New hire acceptance rate | 70% | 85% | 50% | Medium | | Enterprise sales cycle | 90 days | 60 days | 150 days | High | | Logo churn (monthly) | 2% | 1.5% | 4% | High |

3. Build the Scenario Models

For each scenario, produce:

• Revenue forecast (monthly, 24 months)
• OpEx forecast (monthly, by department)
• Cash flow forecast (weekly for 13 weeks, monthly after)
• Runway projection
• Key metrics dashboard

4. Run Sensitivity Analysis

For each key driver, calculate the impact on the most important numbers:

| Driver | Change | Impact on Year-End ARR | Impact on Cash at Year-End | Impact on Runway | |---|---|---|---|---| | Growth rate | ±1% MoM | ±$X | ±$Y | ±Z months | | Churn rate | ±0.5% | ±$A | ±$B | ±C months | | Gross margin | ±1% | ±$D | ±$E | ±F months | | S&M spend | ±10% | ±$G | ±$H | ±I months |

Present as a tornado chart (the most impactful drivers at the top).

5. Define Contingency Triggers

Define specific, measurable triggers that would cause a shift to the downside scenario:

| Trigger | Threshold | Action | |---|---|---| | Revenue misses plan 2 months in a row | 3% for 3 months | > 3% monthly | Emergency churn intervention taskforce | | Cash runway drops below 9 months | User: "Run a full three-scenario analysis for next year — best, base, and worst case — and tell me how much runway we have in each." > Expected behavior: You load the base case revenue and cost models, create upside (+25% revenue, +12% costs) and downside (-35% revenue, -15% costs after flex) variants, produce monthly P&Ls and cash flow statements for each, calculate runway, and present a side-by-side comparison table with clear recommendation on which scenario you're closest to today.

1. > User: "What happens to our runway if we miss revenue by 20% for two quarters?"

> Expected behavior: You apply a 20% haircut to the revenue forecast for the next two quarters, model which costs flex (variable marketing, hiring slowdown) vs stay fixed (existing headcount, office lease), recalculate the cash balance trajectory, and report the new zero-cash date with recommended contingency actions.

1. > User: "Define the triggers that should make us activate our contingency plan."

> Expected behavior: You identify the 4-6 most critical leading indicators (revenue vs plan, churn rate, pipeline coverage, cash balance, fundraising timeline), set numerical thresholds for each, assign owners, and produce a trigger dashboard that can be reviewed at each monthly finance review.

Linked Skills

• Base case revenue → revenue-forecasting
• Base case costs → budget-creation-management
• Cash impact of scenarios → cash-forecasting
• Unit economics under stress → unit-economics-analysis
• How good is the base case anyway? → forecast-accuracy-tracking
• Risk management broader → risk-management

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: gokulb20
• Source: gokulb20/crewm8-cfo-skills
• License: MIT
• Homepage: https://crewm8.ai

Install and usage instructions live in the source repository linked above.