Dr. Paul Borosky, DBA, MBA
Business Plan Writer · Accounting and Finance Glossary
What Is Scenario Planning in Business?
What happens if sales come in lower than planned, or costs climb faster? Scenario planning answers that before it happens. Dr. Paul Borosky, DBA, MBA, builds slow, expected, and strong cases into the projections he prepares for clients. This business plan writer guide explains how scenarios work, which drivers to test, and how lenders read them.
Questions? Call or text (321) 948-9588. Dr. Paul answers personally.
Last Updated: 11/07/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is Scenario Planning?
Does Your Plan Survive a Slow Year?
In Plain English
Three Versions of the Same Plan
Scenario planning means building more than one version of the plan: a bad year, an expected year, and a good year.
Hoping for the best is not a forecast. The point is not to guess which year you will get. It is to know what you will do in each one before it happens.
Watch: Scenarios
Watch Dr. Paul Build Best and Worst Cases
Best and Worst Case Scenarios
Dr. Paul adds a best case and a worst case to a set of projections and shows what changes in each. (8:12)
A Real-World Example
The Coffee Shop That Planned for 180 Customers
A new coffee shop in Clermont, Florida plans on 250 customers a day at a $5 average ticket. A scenario model shows that at 180 customers a day, the shop loses money every month.
Cutting one shift in a slow stretch brings it to about break-even. That becomes the plan’s backup, written down before opening day. A coffee shop business plan with that backup in it is a far easier conversation with a lender.
From Dr. Paul’s Fabled Forest
Visionary Veronica and the Perfect Season
Doctor Owl was at the First Bank of the Forest renewing the deed to his hollow when Visionary Veronica trumpeted through the door, a roll of plans under her trunk.
“A new spa wing!” she announced. “I have trunk space for that idea!”
Isabelle the Iguana, who had come along to help, adjusted her feathered hat and peered at the numbers. Every one of them assumed a perfect season.
“Every angle has a perspective,” Isabelle said carefully. “Let us check one more.”
Doctor Owl borrowed a quill from the teller and drew three columns on the back of Veronica’s plans: a rainy season, an ordinary season, and a sunny season. They filled in the coins for each.
The spa wing only worked in one of the three columns.
Veronica stared at the paper for a long time. Then she drew a smaller wing, one that worked in all three.
This story is one of dozens told across Dr. Paul’s Fabled Forest Business School Series. You just read one from Book 2.
Dr. Paul’s Insight
Dr. Paul builds a conservative case into plans because lenders tend to trust the plan that admits a bad year can happen.
Put It to Work
Three Scenarios, One Plan
Illustrative coffee shop: $5 average ticket, 30 days a month, variable costs at 40 percent of sales, fixed costs of $18,300 a month.
| Slow year | Expected year | Strong year | |
|---|---|---|---|
| Customers per day | 180 | 250 | 320 |
| Monthly revenue | $27,000 | $37,500 | $48,000 |
| Contribution (60 percent) | $16,200 | $22,500 | $28,800 |
| Fixed costs | $18,300 | $18,300 | $18,300 |
| Profit (loss) before response | ($2,100) | $4,200 | $10,500 |
| Response | Cut one shift (saves $2,400 a month) | Follow the plan | Add hours, hire early |
| Profit after response | $300 | $4,200 | Depends on the hire |
Watch Out
Pitfalls When Building Scenarios
One rosy forecast tells a lender you have not thought about risk.
A slow case that is barely slower than expected is not a test.
A scenario without a response is just a scary number.
Costs move too. Test both.
Why It Matters
Benefits of Scenario Planning
- A plan that holds up when things go wrong
- Faster decisions when results slip
- More trust from lenders and investors
- Less panic in a slow season
In Your Business Plan
How Scenario Planning Shows Up in a Business Plan
Lenders tend to trust the plan that shows what happens in a bad year, and what the owner will do about it.
Sample plan excerpt: Financial Plan, Sensitivity Analysis
“In a conservative case with 28 percent lower traffic (180 customers a day versus 250), the business would lose about $2,100 a month. Reducing staffing by one shift saves $2,400 a month, bringing the conservative case to about break-even. The expected case shows monthly profit of $4,200.”
FAQ
Questions Owners Ask About Scenario Planning
How many scenarios should a business plan include?
What is the difference between scenario planning and forecasting?
Do lenders want to see a worst-case scenario?
More From the Series
Keep Building Your Business
Every book in Dr. Paul’s Fabled Forest Business School Series teaches one subject through short stories, real terms, and one-page worksheets.
Dr. Paul Borosky, DBA, MBA
Dr. Paul is a business consultant and author with 14+ years of experience and 1,000+ written business plans. He works with owner-run small businesses on plans, financial projections, and the systems that let a business run without the owner doing everything. This page is part of the glossary for Accounting and Finance for Small Businesses, Book 2 of Dr. Paul’s Fabled Forest Business School Series.
This page is for general educational purposes only. It is not tax, legal, accounting, or other professional advice. For decisions about your own business, consult a qualified professional.