Scenario planning answers what-if questions. Instead of editing the main forecast to see what a new hire would do, a scenario copies the baseline and changes specific assumptions. Management can then compare outcomes side by side, including revenue, costs, staffing, and cash, and decide which version to adopt.
The discipline that makes scenarios useful is separation. The baseline should not change until a decision is made, and each scenario should state its assumptions explicitly. Common scenarios include best and worst cases for sales, a delayed large receipt, a price increase, a new location, or a major equipment purchase.