The hire looked perfect on paper.
VP of Sales. Great track record. $280K total comp. The CEO ran the math: if she hits quota, we’ll 4x her cost in new revenue. Easy yes.
She didn’t hit quota. Not even close. Took six months to realize it wasn’t working, another two to manage her out. Eight months of $280K comp, plus recruiting fees, plus the deals that didn’t close, plus the pipeline that didn’t build, plus the distraction.
Total cost: somewhere north of $400K. For a $14M company, that’s not a rounding error. That’s a quarter of their annual profit, gone.
When I asked the CEO if he’d modeled the downside before making the hire, he looked at me like I’d asked if he’d consulted a fortune teller.
“You can’t predict these things,” he said.
He’s right. You can’t predict them. But you can prepare for them.
The Question Nobody Asks
Every major decision has three versions: the version where it works, the version where it doesn’t, and the version where it really doesn’t.
Most companies only model the first one.
The VP of Sales hire? The CEO had a detailed model showing what would happen if she hit quota. Revenue projections, margin impact, growth trajectory. Beautiful spreadsheet. Completely useless when she missed.
He never asked: What if she hits 50% of quota? What does our cash look like then? How long can we sustain it? What’s our exit plan if it’s not working at month four?
Those aren’t pessimistic questions. They’re planning questions. The difference between companies that survive mistakes and companies that get killed by them is whether they asked those questions before they committed.
Three Scenarios, Every Time
At Cleaner Guys, we rebuilt their decision process around three scenarios for every major commitment:
The plan. What happens if this works the way we expect? This is the spreadsheet everyone already builds.
The delay. What happens if this takes 50% longer or delivers 50% less? Not a disaster—just friction. The realistic downside.
The miss. What happens if this fails entirely? We hire and she doesn’t work out. We invest and the product doesn’t sell. We expand and the market isn’t there. The real downside.
The exercise isn’t about predicting which scenario happens. It’s about knowing what you’ll do in each one before you’re in it.
What This Looks Like in Practice
A client—$22M professional services firm—wanted to open a second office. The plan looked great: new market, existing client relationships, projected breakeven in 18 months.
Before they committed, we modeled the three scenarios.
Plan: $800K investment, breakeven at month 18, profitable by month 24. Cash impact manageable with their existing line of credit.
Delay: Breakeven at month 30 instead of 18. This meant an additional $350K cash requirement. Did they have it? Could they get it? What would they cut to fund it?
Miss: Office never reaches breakeven. What’s the exit cost? Lease termination, severance, wind-down expenses. Roughly $400K to close it, plus the sunk cost.
The CEO looked at the miss scenario and paused. “We could survive that,” he said. “But it would hurt. A lot.”
That’s the conversation you want to have before you sign the lease. Not after.
They opened the office. It hit somewhere between plan and delay—breakeven at month 22. But they went in knowing what they’d do if it didn’t work. That’s the difference.
The Bets You’ve Already Made
Most companies are sitting on bets they made without modeling the downside.
The hire you made assuming they’d ramp in 90 days. What if it takes 180?
The contract you signed assuming the revenue would cover the new costs. What if the customer churns in year two?
The expansion you funded assuming the market would be there. What if it’s half the size you projected?
These aren’t hypotheticals. One of these is probably happening in your business right now. The question is whether you prepared for it or whether you’re scrambling.
The Discipline
Scenario planning isn’t a one-time exercise. It’s a discipline that becomes part of how you make decisions.
The cadence we install in Planning Rhythm:
Any commitment over $50K gets the three-scenario treatment before approval. Not a month-long analysis—an hour with the 13-week forecast, modeling each scenario’s cash impact.
Quarterly, you refresh the scenarios on your biggest existing bets. That new product line—is it tracking to plan, delay, or miss? That office expansion—where are you landing? The act of naming which scenario you’re in forces an honest conversation.
And when something shifts from “plan” to “delay,” you don’t wait to act. You already know what the delay playbook looks like. You built it before you committed.
The Hard Part
The hard part isn’t building the models. That’s arithmetic.
The hard part is being honest about the miss scenario.
Nobody wants to sit in a room and talk about how the thing they’re excited about might not work. It feels like bad energy. Negative thinking. Lack of commitment.
But the companies that skip this conversation don’t avoid the downside. They just experience it without preparation. They make reactive decisions in crisis mode instead of proactive decisions in planning mode.
I’ve watched the same CEO twice: once scrambling to cut costs after a product launch failed, and once executing a pre-built playbook when an expansion came in slow. Same person, different outcomes. The only difference was whether he’d asked “what if we’re wrong?” before he committed.
The Minimum Viable Version
You don’t need sophisticated software for this. You need an hour and a spreadsheet.
Pick your biggest current bet—the hire, the product, the expansion, whatever’s consuming the most cash or attention right now.
Model the three scenarios. Plan, delay, miss. For each one, answer: What’s the cash impact? What would we do? When would we know we’re in this scenario?
If you can’t answer those questions, you’ve made a bet you don’t fully understand. That doesn’t mean it’s a bad bet. It means you don’t know yet whether it’s a bad bet.
The future is unknowable. That’s not an excuse to skip the work.
It’s the reason the work matters.
See how Planning Rhythm works →
