Scenario Planning

Master Scenario Planning

One of the most powerful features of CompassForecasting is the ability to build and compare multiple “What-If” scenarios. Will hiring three new staff members cause cash flow issues next year? What if your sales drop by 20%? What if you take out a massive loan to open a new location?

Instead of guessing and hoping for the best, you can build a dedicated Scenario for it and see exactly what will happen to your bank balance.

The Most Efficient Workflow

Don’t try to build all your different scenarios at the exact same time. The fastest, most efficient way to forecast is to build a rock-solid foundation first.

Build Your Base Case: Stick to your default scenario (you can rename it to “Base Case” or “Realistic Plan”). Complete the entire Setup Wizard, manage your worksheet accounts, generate your worksheet, and tweak the numbers until you are 100% happy with how your baseline business looks.
Duplicate the Scenario: Once your base is perfect, click the Duplicate Active Scenario button (the little + icon next to the scenario dropdown in the main sidebar).
Give it a Color: Name your new scenario something highly descriptive (like “Aggressive Growth” or “Doomsday Drop”) and assign it a bright color so it stands out easily in your menus.

When you duplicate a scenario, everything from the Base Case is copied over perfectly. You don’t have to start from scratch!

Making Your Tweaks

Now that your new scenario is active, you can start making the specific changes you want to test.

1. Wizard Changes (Like Loans!)

The major structural settings from your Base Case were copied over, but you aren’t locked into them. For example, any loans you created in your original scenario are retained here by default.

But what if this new scenario is testing whether you should buy a new warehouse? Simply open the Setup Wizard while in your new scenario, jump straight to the “Loans” step, and add a massive new mortgage. That new loan (and all its automated interest and principal payments) will only exist in this specific scenario.

2. Worksheet Changes

Next, open up the Manage Account Settings dialogue (from the Cash Flow Worksheet menu). Here, you can change your forecasting methods just for this scenario.

Major Tweak Example: If your Base Case expects steady sales, you can change the forecast method on your main revenue lines to predict a devastating 30% drop.
Slight Tweak Example: You might switch “Marketing Expense” from a simple average to “Manual Entry” to plan out a specific, massive advertising campaign over the summer.

Generating the Final Comparison

Once you’ve made your specific tweaks:

Click Cash Flow Worksheet and hit Generate (see Generating the Worksheet). The system will build a totally separate spreadsheet tab dedicated just to this new scenario.
Click Generate Forecast Reports, make sure both your “Base Case” and your “Aggressive Growth” scenarios are checked, and hit Generate (see Understanding Reports).

CompassForecasting will now build complete, separate sets of Profit & Loss, Balance Sheet, and Cash Flow reports for both scenarios, allowing you to easily compare them side-by-side and make confident, data-driven decisions!

Pro-Tips & Ideas

The “Hiring Spree” Scenario: A very common (and highly recommended) scenario is testing new hires. Duplicate your Base Case, go to your new Worksheet tab, insert a few blank rows above your “Wages” account, and manually type in the expected salaries of three new hypothetical employees. Generate your reports and look straight at the bottom line of the Cash Flow Statement: Do you actually have enough cash in the bank in 6 months to afford them?
The “Lost Whale” Scenario: What happens if your biggest client suddenly leaves? Create a scenario where you manually delete their expected revenue. Does your business survive the next 12 months, or do you immediately breach your overdraft limit? Building this scenario helps you figure out exactly how much cash buffer you truly need.