When cash drops, what's your plan?

Hi Everyone,

When reality diverges from your forecast (which it will), you risk making decisions under pressure, rather than via a pre-set plan.

A Good/Base/Bad scenario framework gives you three working views of the future and, more importantly, a set of pre-committed actions for each.

Today, we're walking through how to build one that will strengthen your decision-making when you need it most.

One forecast isn't enough

The framework works best when you run it at two levels:

1. The first is a 13-week cash model. Its job is liquidity – tracking week-by-week cash balance, collections timing, and payables.

When a deal slips or a large invoice goes overdue, this is where you see it first and where you decide what to move.

2. The second is a rolling 12-to-24-month operating plan. Its job is strategic – hiring decisions, spend levels, when to raise.

This runs monthly and gives your leadership team a shared view of where the business is heading under each scenario.

You need both.

Without the short-horizon view, a liquidity problem can catch you mid-month with no time to respond.

Without the rolling plan, hiring and spend decisions get made without a shared reference point.

What goes into each scenario

You don't need to model everything – just the variables that move cash the most.

For most businesses, those are:

• new customer acquisition rate,
• churn or renewals,
• expansion revenue from existing accounts,
• how quickly customers pay,
• hiring pace.

Start with the Base case, and treat it as a working midpoint rather than a target.

Before you finalize it, ask your team what would have to go wrong for cash to drop by 30% in six months. If the answer comes quickly and feels plausible, your Base is probably too optimistic. Adjust it before you commit.

For Good and Bad, shift each driver by a specific amount based on your own historical data rather than a round-number guess.

For example, if your sales conversion has run between 15% and 25% over the last year, those are your scenario boundaries. Using your actual historical range makes the scenarios feel real rather than theoretical, which matters when you're presenting them to a leadership team or a board.

What each scenario should trigger

Scenarios in a spreadsheet don't change anything on their own. The value comes from deciding in advance what you'll do when the numbers move — so that when they do, the conversation is about execution, not about what to do.

Runway is the most useful number to watch, and the further it drops, the harder the decisions get.

At 12–24 months of runway, you have room to make changes that don't disrupt the business. The most useful moves at this stage are on cash timing – chasing slow payments and pushing out what you owe to vendors. Alongside that, push your product roadmap toward work that drives revenue rather than work that doesn't.

These are relatively easy to reverse if things improve.

At 6 months, you need to act on costs directly. Stop filling open roles unless they directly bring in or protect revenue – everything else waits. At the same time, go back to your vendors and negotiate longer payment windows.

Hiring and vendor costs are two of the biggest items you can actually move quickly at this stage, and neither requires cutting anyone already on your team.

At 3 months, the decisions are harder. Reducing headcount, cutting parts of the product, and actively exploring fundraising or a sale all need to happen in parallel.

These take time, which is why you want to have agreed on them before you get there. When you're at 3 months of cash, you don't have weeks to spend on internal debate.

Try this today

Calculate your runway under your current Base case.

Then run a quick reverse stress test: write down two or three things that would push you into the Bad scenario and decide now what you would do at 12, 6, and 3 months.

Keep it in a short table – Runway threshold, Action, Owner.

That table is the most useful output of any scenario exercise, and it takes about 20 minutes to build.

Go deeper

👉 SuperCFO: How to Build a Cash Flow Runway for 12+ Months – a walkthrough of cash management levers, including how to use vendor terms, hiring, and collections to extend runway

👉 McCracken Alliance: What is Scenario Planning in Finance – how to set Base case assumptions without optimism creep and how to frame scenarios for a board

👉 Drivetrain: 10 Scenario Planning Best Practices for CFOs – covers how to set trigger points, build cross-functional scenarios, and avoid treating the Base case as the default outcome

👉 Vena Solutions: How to Use Scenario Planning for Decision-Making – connecting scenarios to operational decisions rather than leaving them as a finance exercise

Coming up tomorrow

Tomorrow we're looking at why I&D programs often produce good intentions but little change in daily decisions – and how to fix that at the manager level.

That's it for today! Have a great week.

P.S. Do you run Good/Base/Bad scenarios right now, or are you working from a single forecast? Let us know – we're curious how common this setup actually is.