Recession-Proof Score
Stress-test your revenue mix, margins, cash, and debt against a downturn, and get a pre-built cut plan.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Annual revenue
- 5,000,000
- Gross margin
- 40
- Annual operating expenses (overhead)
- 1,600,000
- Share of overhead that is payroll
- 60
- Cash on hand plus undrawn credit line
- 300,000
- Annual debt payments (principal + interest)
- 150,000
- Revenue that is recurring or under contract
- 25
- Revenue customers could easily postpone (discretionary, project, luxury)
- 40
- Share of revenue from your largest customer
- 12
- Downturn scenario: drop in market demand
- 25
Example results
Recession-proof score 54/100 (Vulnerable): a 25% downturn swings cash flow to -$275K a year and cash lasts about 13 months; a three-tier cut plan recovers $304K.
- Recession-proof score
- 54/100
- Annual cash flow in downturn
- -$275,000
- Runway in downturn (before cuts)
- 13.1 mo
- Revenue drop you can absorb
- 12.5%
- Your expected revenue drop
- 26.3%
- Debt service coverage today
- 2.67x
- Months of fixed costs in cash
- 2.1 mo
- Cut plan savings (all tiers)
- $304,000
What stands out
A 25% downturn burns $22,917 a month
Your mix makes revenue fall about 26%; cash covers 13.1 months before cuts.
Revenue can fall 12.5% before cash flow turns negative
Each 1% of revenue lost removes $20,000 of gross profit against $1,750,000 of fixed costs and debt.
Only 2.1 months of fixed costs in cash
Lenders tighten credit lines in downturns; draw or extend lines while the numbers still look good.
40% of revenue is discretionary
Discretionary and project work is typically the first spend customers postpone.
Three-tier cut plan recovers $304K vs a $275K gap
The plan closes the gap if triggered on time.
Next actions
- Approve the three-tier cut plan now with explicit revenue triggers, so cuts happen in weeks, not after a quarter of losses.
- Build liquidity to 6 months of fixed costs ($875K): retain earnings and secure or extend a credit line while results are strong.
- Shift mix toward recurring and must-have work: maintenance plans, service agreements, retainers.
Model assumptions & limitations
- Rule of thumb: in a downturn, recurring revenue falls about 0.4x the market drop, discretionary revenue about 1.5x, and other revenue 1x. Your history in the last downturn is a better guide.
- Gross margin percentage and overhead are held constant in the downturn; in practice price pressure often cuts margin further.
- Cut plan percentages (15% / 10% of non-payroll, 5% / 10% of payroll) are planning heuristics, not targets for your specific business.
- Score weights: profit cushion 25%, liquidity 20%, revenue mix 20%, debt load 15%, customer spread 10%, gross margin 10%.