Wednesday, August 3, 2011

Scenario Planning....

As a follow up to my post on forecasting, I want to share with you this useful article.  It is more important than ever to prepare "what if" scenario's as part of the planning process.  This can be as simple as taking a historically based forecast and moving key drivers up or down by a percentage range.  For example, what would happen to cash flow if revenues decrease by 5%, 10% or 30%?  What if our key customers increased or decreased business by X%?  What if our key cost inputs or vendors changed by X%?   After all, uncertainty is the new normal today.

Scenario Planning: Navigating Through Today's Uncertain World