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Planning for an uncertain year: three scenarios and a trigger list
A single forecast is always wrong. Three versions of the year, and a short list of signs that tell you which one you are in, let you act early instead of late.
Forecasts are useful because they force you to think, not because they come true. Scenario planning makes that thinking explicit: what if sales are 15% lower? What if a major customer leaves? What if costs rise faster than prices?
Two of the three scenarios
Downside
- Sales 15% below plan
- One large customer lost
- Costs up with wages and energy
- Actions: pause hiring, cut discretionary spend, draw facility
Upside
- A large contract won
- Faster growth than staff can handle
- Cash stretched by working capital
- Actions: hire early, agree funding, protect margin
The trigger list
- Order book or enquiries down for two months in a row.
- Debtor days rising by more than five days.
- Gross margin two points below plan for a quarter.
- Cash forecast below the minimum balance at any point in 13 weeks.
Write the actions down while you are calm. When a trigger is hit, you are carrying out a plan, not inventing one under pressure.
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