The Role of Scenario Modeling: Best, Base, and Worst Case

amberpeoples
Nov 13
3 min read

Ever made a decision in your business that felt more like a guess than a plan? We’ve all been there. Or maybe you’ve hesitated to make a decision because it felt too uncertain...like you were shooting in the dark.

There’s a simple tool that can turn much of that guesswork into clarity: Scenario Modeling.

At its core, scenario modeling is just a structured way to look at your options from three angles: Best Case, Base Case, and Worst Case. Think of it as zooming out before making a big move so you can see the full road ahead (including the potholes).

Here’s how it works, and why it’s a game-changer for decision-making.

What Is Scenario Modeling?

Scenario modeling is a planning technique where you imagine how a decision could play out under different conditions:

Best Case: Everything goes right.
Base Case: Things go as expected.
Worst Case: Things go...sideways.

You’re not predicting the future, you’re preparing for it. Your base case is what you realistically expect to happen. Your best case plans for when everything aligns perfectly. Your worst case covers what happens if things don’t go as planned.

Why It Matters (Especially for Small Business Owners)

When you run a small business, you don’t always have the luxury of a safety net. Every decision....whether hiring, launching a product, or expanding...comes with real risks.

Scenario modeling helps you make confident, informed decisions because you’ve already considered multiple outcomes. It also helps you:

Plan for cash flow fluctuations
Spot potential red flags early
Sleep better knowing you have a Plan B (and C)

How to Build a Simple Scenario Model

You don’t need fancy software. A spreadsheet (or even a notepad) works perfectly. The key is honest, realistic estimates.

Let’s look at a real example: I recently added a new role to our team. Before making that decision, I built out three potential scenarios.

Best Case

The new hire ramps up quickly and boosts efficiency.
They begin handling client-facing work within 30 days, freeing up team capacity.
We hit our revenue target two months early.

Base Case

The new hire performs as expected.
They take on client-facing work within 90 days.
We stay on budget and meet revenue goals as planned.

Worst Case

The new hire needs more training...or doesn’t work out.
Sales efforts slow down to maintain service quality.
I personally step in on client work until a successful replacement is found.

Because I was comfortable with what could happen in the worst case, I decided to move forward. In reality, we experienced a mix of the base and worst case, but we were prepared, and that made all the difference.

If I hadn’t been able to handle the worst case, I would have waited to hire. That’s the power of scenario modeling, it helps you make smart, confident choices based on what you can realistically manage.

Pro Tips for Smarter Scenario Planning

1. Start with your base case. Make this your most realistic outcome, based on current data and expectations. Don’t build in wishful thinking, just what’s most likely to happen.

2. Stretch and stress it. From there, create your best and worst cases. Push the limits...what’s the rosiest outcome? What’s the roughest?

3. Use real numbers. Estimates are fine, but the more specific, the better.Include time, not just money. Especially if team bandwidth or training time is part of the equation.

4. Update regularly. Circumstances change. So should your scenarios. My team revisits our hiring model before each new role to reflect our current situation and needs.