Austin Smoak·May 30, 2023

$3m in Cash Flow: How to Buy a Small Business | Austin Smoak Interview

Austin Smoak is a former Goldman Sachs investment banker (real estate IB, 2018-2021) who launched a self-funded search in late 2021 and closed on a Central Florida residential roofing company in November 2022. The business does approximately $8 million in revenue and $3 million in EBITDA — a significant deal for a self-funded searcher — and was found on BizBuySell, priced at 3.5x at marketing but negotiated down to roughly 2.75x at close because the sellers, a husband-and-wife founding team, were fatigued from prior buyer disappointments and the EBITDA had grown ~30% during the seven-month deal process. Austin financed the deal via an equity syndicate of smaller LPs and personal relationships after a family office sole-investor fell through 2.5 weeks before closing. He also owns two passive food/beverage franchises (Focus Brands) acquired at under 1x EBITDA in early 2022 that generate ~$150k SDE and funded his search period. Post-close, Austin hired a GM from day one and spent the first three months working 17-hour days to implement technology (replacing paper processes), add digital marketing, build supplier relationships, and transition the business — before settling into 20-40 hours per week. His strategic vision is to build a roofing roll-up platform in Florida under Groveoaks Capital, targeting seven to ten million in total EBITDA across three to four companies, with an eventual path to independent sponsorship in lower middle-market private equity.

Deal facts

multiple: ~2.75x EBITDA at close (marketed at 3.5x)
sde ebitda: EBITDA $3m (grew from ~$2.25m at time of listing to $3m by close)
revenue: ~$8m
financing structure: Equity syndicate: smaller LP checks ($25k-$50k each) plus personal relationships; SBA not mentioned explicitly
notes: Business marketed at 2.25x EBITDA (~$2.25m) which grew to $3m EBITDA by close in November 2022, bringing effective multiple down to ~2.75x. A family office intended to be sole equity investor but backed out 2.5 weeks before closing; replaced by LP syndicate covering ~70% and personal relationships for remaining ~30%. Also owns two food/beverage franchises (Auntie Anne's, and others under Focus Brands) acquired Feb 2022 for less than 1x EBITDA, combined SDE ~$150k.

Why this business

Austin was drawn to the roofing business because it was very lean and had a simple business model — not too many dependencies or processes that would be overwhelming for a new owner to take over. He felt he could step into the seat and thrive, and saw the fragmented Florida roofing market as an ideal platform for a roll-up strategy. He also wanted a business doing at least $1m in EBITDA in geographies he felt comfortable moving to (Georgia, Florida, Texas, Chicago, Southern California).

What's working

Strong brand built over 20+ years by the founding husband-and-wife team — the phone was ringing purely on brand and word of mouth with zero marketing spend before acquisition
Highly fragmented local market: within each county in Florida, only two or three roofers 'own' that county, so brand awareness creates a defensible position
Hired a GM on day one (sourced through the family office that ultimately backed out of the deal) and was intensively present for the first three months to manage the transition; by months four-plus, settled into 20-40 hours per week
Implemented technology across the business (estimating, materials ordering, payment processing) replacing all paper/Word/Excel processes, creating operational leverage
Added digital marketing channels (SEO, Google Ads, Facebook Ads, LSA ads, Nextdoor) where there had been none
Florida's exposure to tropical storms makes it a strong market for roofing demand
Residential roofing repairs and replacements carry higher margins than commercial or new construction

What's hard

First seven months from contract to close were described as 'arduous' — navigating licensing in Florida, raising capital for the first time, and managing all the moving pieces of a first acquisition
A family office planned to be the sole equity investor backed out 2.5 weeks before closing, forcing Austin to scramble and close the equity gap via smaller LPs and personal relationships
Ruptured his Achilles tendon during the deal process
The husband and wife each wore four to five hats in the business; replacing them required hiring a GM, additional admin staff, warehouse support, and a dedicated salesperson
First three months post-close required 17-hour days to manage transition, implement software, transfer supplier and customer relationships, and train the GM
Residential roofing is not a recurring revenue business — it is brand- and word-of-mouth driven with essentially no contracted customer base
Attempted to scale a franchise portfolio to 10 units within Focus Brands but the franchisor blocked the acquisition despite having a deal under contract at ~1.75x for 8 units with ~$700k EBITDA

Notable quotes

You have to get lucky you know everybody wants to play strategy behind things you know it's for me it was God and luck you know um same thing with the franchises as well you know it's you have to put the effort in you have to put the Reps in but it's a it's a numbers game at the end of the day

I was in the business 17 hours a day in the first three months so developing the transition planes giving them daily tasks what needs to be done delegating what his tasks are going to be so I was present within the business daily as the owner

Everything prior to me coming aboard was carbon copy on paper and a word doc or somewhere in Excel or you know just on a physical sheet of paper so I implemented processes around you know how we're going to order materials you know how we bid through technology how we receive payment through technology all of those things

The market is very fragmented so within each county there are you know two to three roofers that kind of own that county within Florida there aren't any large companies that own the state when it comes to roofing