Step 3: Run Scenario Modeling

Stop flying blind. Build 3–4 simple forward-looking financial and operational models to help your team prepare for different outcomes, whether growth surges or stalls.

Why This Matters

Series A is where growth plans get real. Scenario modeling ensures your ops plans are adaptable, not rigid. It protects against over-hiring, underfunding, or overcommitting to vendors when reality veers from your assumptions.

Key Activities

Build a basic spreadsheet model:
Inputs: Revenue, customers, churn
Outputs: Headcount, COGS, opex
Create 3–4 scenarios:
Best (e.g., 120% plan)
Base (realistic growth)
Brutal (e.g., 70% or downturn case)
Stress-test each version across ops areas: hiring, vendors, CS, tooling
Share with department leads and incorporate into hiring/roadmap planning

Common Mistakes

Modeling too late (e.g., only during board prep)
Failing to adjust operating plans for each case
Only building one "best guess" scenario
Not involving functional leads in planning
Overengineering the model — then not updating it

Signals You're Doing It Right

Every department knows their headcount/plan across 3 cases
You’ve identified what changes first in a downturn (vendors, hires, etc.)
There’s no scramble if targets are missed — just a shift to Plan B
Ops decisions are more deliberate, not just reactive
Your model is referenced regularly — not buried in a folder

Red Flags

A single scenario drives all decisions
Spending or hiring continues even if revenue misses
Department leads are surprised by plan adjustments
No contingency built into contracts or staffing
Your “plan” changes frequently, but models don’t reflect it

Who Should Own This

CFO, COO, or Founder, in partnership with finance and functional leads