How to Write a Scenario Plan

bizfluent article image

DragonImages/iStock/Getty Images

Business owners can avoid potential problems by anticipating them in advance and developing “If so, then what?” scenario plans. It’s not negative thinking to plan for a drop in sales, the loss of a key supplier or a rise in materials cost. Using a simple template, you can write scenario plans that help you effectively deal with potential problems and opportunities.

Identify and Research

The first step in writing any scenario plan is to develop the scenario in detail and conduct research to support the possible impacts of the occurrence. Scenarios can include a drop in prices, new competitor, tightening labor market, security breach, loss of a key customer or a disaster such as a fire or hurricane. Conduct research into how the scenario might develop, looking for specific advance warning signs. Write a list of the domino effects the scenario might have on each of your departments. For example, a drop in sales might lead to a change in your production, debt-service or labor plans. Develop a list of the responses you might undertake to address the scenario and its affects. You are not committed to including each the responses in your plan, but it helps to brainstorm ideas. As you begin to write your document, you will then be able to determine if each one is helpful or not.

Outline the Document

Any good business document begins with a detailed outline. This will help you write the scenario plan in a cohesive fashion. Your outline should include an executive summary, a description of the potential scenario, impacts of the scenario, solutions for problems, actions to address opportunities, your recommendations, a summary and an appendix. You might have multiple sub-sections in some of the macro sections of your document. For example, in the section covering the potential impacts of a scenario occurring, you might list the effects on your accounting, human resources, IT, production, and revenues.

Write Your Sections in Order

Start writing your document in the order in which the reader will read it. This will help you ensure a logical flow from one section to the next. It will also help you avoid making a general reference to something in a later section you have not explained in an earlier section. Start with your executive summary, which is an overview of your document. This summary should not contain support material, but instead be more of a “what” section without the “why.” You will provide the support in your subsequent sections. Include the scenario, the problem or opportunity it presents and your recommended solution. Follow the dominoes that fall when a scenario occurs as you write the sections of your report, tell the reader how you’ll address them, and then make your recommendations.

Summarize and Recap

Follow your recommendations with your summary. After you have written your sections, summarize your findings without detail. Your paper can follow this classic model of writing: “Tell them what you’re going to tell them; Tell them; Tell them what you’ve told them.”. This will help you get your main point across at the start, support your contentions, then re-affirm your main point at the end. Your end-of-document summary should be similar to your executive summary, but you’ll be able to reference a few key points from your document in this section. Follow that with any charts, graphs, budgets or other exhibits in your appendix.