You've built your three scenarios. You have an optimistic case, a base case, and a pessimistic case. Now what? Most founders stare at the numbers and aren't sure what they're supposed to do with them. Here's how to actually read your scenario output and turn it into decisions.
Start with the runway gap
The first number to look at is the difference in runway between your base case and your pessimistic case. If your base case shows 16 months of runway and your pessimistic case shows 9 months, you have a 7-month gap. That gap is your risk exposure.
A 7-month gap means that if things go worse than expected, you have 7 fewer months to figure it out. That's not a reason to panic — it's a reason to know your early warning indicators so you can tell quickly whether you're tracking toward the base case or the pessimistic case.
Find the breakeven spread
The second comparison is the month where each scenario reaches cash flow breakeven — the point where you stop burning cash. In the optimistic case, you might reach breakeven in month 18. In the base case, month 24. In the pessimistic case, month 34 or never.
That spread tells you how dependent your path to sustainability is on things going well. A wide spread means your breakeven timeline is highly sensitive to your assumptions. A narrow spread means you'll get to breakeven roughly on schedule regardless of which scenario materializes — which is a much more resilient position.
Identify the assumptions driving the spread
Not all assumptions create equal spread between scenarios. Some inputs — usually your top-line growth rate and churn — drive most of the difference between optimistic and pessimistic outcomes. Others — usually fixed costs — barely move the needle.
The assumptions that create the largest spread are your highest-risk inputs. Those are the ones to monitor most closely, update most frequently, and build contingency plans around. If your churn rate is the single biggest driver of the gap between your base and pessimistic cases, then churn is the metric you need to watch every month.
Set your decision thresholds in advance
The most useful thing you can do with scenario output is set decision thresholds before you need them. For example: if monthly churn exceeds 5% for two consecutive months, you'll cut discretionary spending by 20%. If new customer acquisition falls below 15 per month for a quarter, you'll delay the next hire.
These aren't reactive decisions made under pressure — they're pre-committed responses to specific data signals. Having them in place means you respond faster and more rationally when the pessimistic scenario starts materializing.
Track which scenario you're in
Every month when you close your books, compare your actuals to your three scenarios. Are you tracking above your base case, in line with it, or below it? The answer tells you which scenario is materializing and whether your current spending decisions are appropriate for that scenario.
Horizon's scenario comparison view overlays your actuals against each scenario so you can see at a glance where you stand. The goal is to always know which scenario you're in — not to be surprised by it six months later.
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