CFOGPS · Where are we going?
What would happen if we ___?
Run the big move on paper first, and the bet becomes a decision.
Big moves feel like bets because the effects arrive over months and in more than one place. Modeling them lays those effects out before you commit.
An approach
- Describe the move in one sentence. Then list what it changes: revenue, costs, timing, people.
- Estimate each change as a range. A low and a high, not a single number.
- Run it through your forecast. Look at profit and cash three, six and twelve months out.
- Find the break point. What would have to go wrong for this to hurt?
- Decide, and pick your signals. Choose the two or three numbers you’ll watch after you commit.
You can answer it when
- You’ve modeled the move’s effect on cash before committing.
- You know where it breaks.
Related
Want to work through this with us? We’ll bring the forward view.
Work through this with usA short starting guide. More detail is on the way.
