Bill CanadyCEO & Founder, The 80/20 Institute · Be a Great CEO: Learn how to Fix it, Grow it, & Sell it.

CEO's Optimistic Plans: From Boardroom Fiction to Reality

1 Sept 2026 · 1 min

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In this brief commentary, Bill Canady explains how a company's exit valuation is highly sensitive to the purchase multiple applied at sale. Using a $75 million exit assumption based on a 10‑x multiple, he shows that a modest reduction to 9‑x or 8‑x dramatically lowers the exit value to $83 million and $94 million respectively, translating into a $19 million EBITDA swing that founders cannot control. He argues that because this variable is outside management’s control, CEOs should build financial models around pessimistic scenarios rather than optimistic ones that merely make the plan look attractive in a board deck. Most CEOs, he says, default to optimistic assumptions, turning realistic plans into fiction that only succeeds if the market cooperates.

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Nobody sent you an email about that. And here's the part that should keep you up. That $75 assumes you exit at the same multiple you entered. Take one turn off, 9 instead of 10, which isn't a disaster. That's a normal choosy in a soft market. And the number goes to $83 million at 8 times, $94 million. Same company, same hold, $19 million of EBITDA difference. And you don't control the variable, which is why you build to the pessimistic case. and you're delighted if the market cooperates. Most CEOs build to the optimistic case. I mean, come on, we're only human, because that's the version that makes the plan look achievable in a board deck. That's how a plan quietly becomes fiction.