Eric Donahue·March 23, 2026

40% Growth in Year 1 of a Paving Business | Eric Donahue Interview

Eric Donahue, a retired Navy SEAL (including 13 years at SEAL Team Six / DEVGRU), bought Peninsula Paving — a commercial asphalt paving company in Hampton, Virginia (Hampton Roads area) — in January 2025 after discovering ETA through veteran transition mentors. He purchased the business for approximately $1.6m (plus $150k in seller-financed working capital, total ~$1.75m) at roughly 3x adjusted EBITDA of ~$500k on ~$4.1m in three-year average revenue, using a conventional loan from the business's own bank (Town Bank) rather than an SBA loan, with the seller carrying ~33% as a note. In his first 13 months, Eric grew revenue approximately 40% to nearly $5.7m by capitalizing on a major competitor's exit from small-job commercial paving, subcontracting complementary services rather than referring them out, splitting his crew to run simultaneous job sites, and implementing operational disciplines drawn from his military background — including digitized field information, formal pre-job site inspections, and clear written role definitions for his foreman and superintendent. The main ongoing challenges are labor scarcity in a specialized trade and the capacity ceiling of a single paving crew, which Eric is preparing to overcome by reinvesting year-one profits into backup equipment to enable a second simultaneous crew. His military retirement income (~$80k/year) allows him to draw only $75k from the business, freeing substantial cash for reinvestment.

Deal facts

purchase price: ~$1.6m (plus $150k working capital, total ~$1.75m)
multiple: ~3x adjusted EBITDA (~3.2x SDE)
sde ebitda: SDE ~$700k; adjusted EBITDA ~$500k (after imputed management salary of ~$200k)
revenue: $4.1m (3-year average at time of purchase); ~$5.7m in year 1 under new ownership
financing structure: Conventional loan (non-SBA) from business's existing bank (Town Bank) for ~66% + seller note for ~33% (including $150k working capital seller-financed)
notes: No SBA used; bank was already the business's lender and was familiar with its track record. Personal guarantee required on conventional loan. Seller (Andy) had previously tried a broker for 12 months with no offers. Eric also purchased the real estate/land the business operates from in a separate transaction, which helped collateralize the loan. Seller stayed on for ~4.5 months post-close.

Why this business

Eric was a Navy SEAL (including 13 years at SEAL Team Six / DEVGRU) who retired in late 2024 and discovered ETA through mentors. He had dabbled in tree work as a side business and concluded buying an established company was better than building from scratch at his stage of life. He was introduced to Peninsula Paving through a network referral chain starting with a nonprofit that helps veterans transition. He was attracted to blue-collar services because he believed doing basic things at a very high level — responsiveness, job prep, follow-through — would place a company near the top of the industry, mirroring what made elite military units successful. He also liked that commercial paving has some recurring demand characteristics (maintenance work, liability-driven property managers) rather than purely cyclical new-construction exposure.

What's working

40% revenue growth in first 13 months, from ~$4.1m to ~$5.7m, driven by a combination of a major competitor exiting the small-job market after being acquired, subcontracting complementary services (seal coating, line striping, concrete) rather than referring them out, and splitting the crew to run two simultaneous job sites on days when some workers lacked base access
Operational efficiency gains from digitizing job information (tablets in the field with real-time scope updates replacing outdated printed forms), pre-job site inspections by the superintendent to catch issues before crews arrive, and clear written roles-and-responsibilities separation between foreman (day-of execution) and superintendent (pre-job logistics)
Securing a conventional loan (non-SBA) from the business's existing bank, Town Bank, which was already familiar with the business's track record — resulting in better rate, considerably lower fees, and 7-year amortization
Leveraging his military demolition experience to qualify for a Virginia Class A Heavy Highway contractor's license, allowing him to hold the license himself rather than relying on a third party
Key office employee Dave retained through transition; Dave knew all clients, estimating, and field operations, serving as continuity through seller departure. A second estimator hired from the acquired competitor helped absorb surging demand
Military retirement income (~$80k/year including VA benefits) allows Eric to pay himself only $75k from the business and reinvest the remainder, giving him significant reinvestment flexibility
Culture upgrade: increased accountability and structure filtered out underperforming employees naturally while engaging and elevating high performers; field crew now refers new hires
Commercial focus on GC relationships (85% of revenue with 10-12 repeat clients) provides some revenue predictability despite project-based model; base/military installation work commands higher subcontractor markups due to restricted-access complexity

What's hard

Finding and retaining skilled labor is by far the biggest ongoing obstacle — paving requires specialized crew skills and the supply of qualified workers is thin
Employee dishonesty was a culture shock coming from an environment (SEAL Team Six) where a single lie could get someone removed; managing this is a recurring challenge
Business is at capacity with one paving crew; growing further requires a significant stair-step investment (second crew with paver, rollers, trucks, ~8 people minimum) rather than gradual linear growth
Buying a paving business in January (winter) meant learning operations during the slow/cold season when asphalt plants may not run below 40°F — not ideal timing for transitioning into the business
Mid-year personnel turnover was stressful — there was a period where losing one or two more employees would have stretched the team dangerously thin
Previous owner (Andy) had been on 'cruise control' working 2-3 days/week, so some operational processes were underdeveloped (outdated job scope documents, insufficient pre-job site prep)

Notable quotes

In blue collar specifically, you know, if you do basic things at a high level, you're going to put yourself at, you know, close to the top of the industry.

I go, 'Yeah, you know, it's not like, you know, if we make a bad decision like someone's going to get killed, you know, what's the worst case scenario? Maybe we lose like a little bit of money on a job.'

One of the biggest, you know, culture shocks to me, being outside of the command I used to work at was just people's kind of nonchalant way that they'll be dishonest. I can count on one hand the amount of times I was lied to in my former job.

My initial goal when I bought the company was to double it in five years. I think we're going to beat that handedly.