Test business decisions before you make them with financial modeling.
Scenario modelling lets you answer 'what if' questions: What if we hire three more staff? What if we drop pricing 10%? What if we buy new equipment? Instead of guessing, we build a financial model that shows the impact on profit, cash flow, and your break-even point. This lets you make confident decisions based on projected outcomes.
The short answer
Scenario modelling is the use of a financial model, built on a business's actual historical figures, to project how a specific decision—such as hiring, changing prices, or buying equipment—would affect profit, cash flow and break-even before the decision is made. It lets owners compare 'what if' options side by side and see which assumptions matter most to the outcome. It’s one function of Cash Flow & Reporting within your Finance Hub — part of a connected back office.
The Challenge
Common problems we solve
You want to hire but aren't sure if the business can afford it at your current growth rate
You're considering a capital investment but don't know what revenue you need to justify it
You're thinking about entering a new market but can't quantify the financial impact
You've changed pricing and want to understand the profit impact
You want to expand to a new location but don't know if it's financially viable
What's Included
Here's what you receive
Financial Model
Interactive model showing income statement, cash flow, and key metrics under your scenarios. You can change assumptions and see immediate impact.
Scenario Comparison
Side-by-side comparison of different options (e.g., 2 new hires vs. 3 new hires) showing profit, cash, and payback for each.
Sensitivity Analysis
Analysis showing which assumptions have biggest impact on outcome. Helps you focus on what matters most.
Break-Even Analysis
For investments, we calculate when you'll recover the capital and what daily/monthly sales/usage is needed to break even.
Update & Iteration
Model updated quarterly with actual results so projections are refined as year progresses.
Why It Matters
How it works
Most business decisions are made with incomplete information. Should we hire? Should we invest in new equipment? Should we enter a new market? The answer always seems to be 'it depends'—but on what? Scenario modelling makes the dependencies explicit. When you're considering hiring two customer success staff at $70k each, the model shows: 'At your current customer acquisition cost and churn rate, you need to grow the customer base 20% to cover the salary cost while maintaining margin.' Suddenly you know what the decision depends on. For capital investments, modelling shows break-even and payback period. For pricing changes, it quantifies revenue and margin impact. For expansion, it projects profitability. For market decisions, it shows required performance. Good modelling doesn't eliminate risk, but it replaces guessing with grounded projection based on your actual business metrics.
Financial impact of major business decisions quantified
Break-even and payback period calculated for investments
Sensitivity analysis showing which assumptions matter most
Multiple scenarios compared side-by-side
Cash flow impact distinct from profit impact
Confident decision-making based on projections
The Process
How scenario modelling works
Understanding your decision: hiring plan, pricing change, investment, expansion, or other scenario
Extracting historical baseline from your actual results (margins, productivity, customer metrics)
Building a model incorporating your assumptions about the change
Sensitivity analysis showing impact if assumptions vary
Multiple scenarios modelled for comparison
Results presented with clear decision recommendations
Best For
Who this service is ideal for
Growth-stage businesses considering significant investments or expansion
Owners evaluating hiring decisions and talent investment
Businesses contemplating pricing or market strategy changes
SMEs seeking to reduce decision-making risk through quantified projections
Complementary Services
Related services to explore
Live Management Dashboards
Management dashboards visualize your most important financial metrics in real-time. Instead of waiting for monthly reports to see how you're performing, you have live visibility into cash position, revenue, costs, customer metrics, and any KPIs that matter for your business. Dashboards are customized to your strategy so you see what drives success.
Financial Decision Support
Major business decisions have financial implications that are often underestimated. We provide expert financial analysis supporting key decisions: should you hire? Can you afford to? What about expansion? What's the acquisition cost? We quantify impact and help you make confident decisions.
Ready to get started with scenario modelling?
We can help you implement scenario modelling and start seeing results. Book a consultation to discuss your specific needs and explore how this service can transform your business.