Can you afford the hiring plan?
A headcount plan charges its cost from the month each person starts and books its revenue much later, if at all. This template runs the plan through a 24-month cash model with bookings per rep, churn and cost per head all uncertain, and returns the runway the plan actually buys, plus the odds you clear the twelve-month bar the board set.
Finance Advanced Monte Carlo Pro engine
After you install, this is the model to open.
Can We Afford This Hiring Plan?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
At the middle of every range the plan buys 13 months, so on paper it clears the bar. Across 20,000 trials, with bookings and churn moving together:
- P10 (bad quarter)
- 11 months
- Median
- 13 months
- P90
- 16 months
- Chance of clearing 12 months
- 75%
The plan clears twelve months about three times in four, so the honest answer to the board is not yes, it is a one in four chance of coming up short. The median cash position at month 18 is negative $1.9M, which is the size of the raise the plan quietly assumes. And the tornado ranks churn first, cost per head second and bookings per rep third, so the assumption worth arguing about is not the hiring number at all.
The model
A 24-month cash grid with the plan written into it: 12 hires landing three a quarter in months 1, 4, 7 and 10, eight of them carrying quota. Every head burns from the month it lands, and a rep only books from three months after that.
| Starting cash | $3,400,000 |
| Current ARR | $20,000,000 |
| Existing headcount | 78 |
| Other opex per month | $400,000 |
| The plan | 12 hires, 8 of them carrying quota |
| New ARR per quota rep per year | $180K - $320K - $480K (uncertain) |
| Annual gross churn on the base | 8% - 14% - 24% (uncertain) |
| Fully loaded cost per head | $185K - $195K - $210K (uncertain) |
| Months of runway under the plan | simulated |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Sign the flat round, or wait for the milestone?Raise Now, or Wait for the Milestone?
- What does ignoring correlation cost you?
- Do your two holdings actually diversify each other?How Two Assets Move Together
- Will you run out of cash this quarter?Will the Cash Last Thirteen Weeks?
- What are the odds you breach the covenant?How Close Is the Covenant?
- Every line looks fine. Will the year still go over?Will the Budget Hold?
Every model like this one, and the method behind them: Monte Carlo simulation.