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Mike Davies – Compass Computer Consultants

In 2014 Mike Davies sold his business, Compass Computer Consultants because he was not interested in the day-to-day management of running a business, he was a developer at heart. He said: “The thing that excites me the most is designing and writing software.” Many tech entrepreneurs feel this way.

Compass is a specialist software development company, with an established reputation for providing a range of powerful solutions to the further education sector.

Technical at heart

For Mike, the business was doing well but his business partner had reached his chosen retirement age: “He was working reduced hours, and by the time we came to sell he was down to 1-2 days per week. I was left running all the day-to-day management issues. I didn’t mind shouldering all the responsibility and my business partner was always on hand for support, but I started to find it boring. For me it was always the technical side that gave me a buzz, I am a software guy, technical at heart. That’s when we decided to start looking at selling.”

After making the decision to sell Mike looked around at different advisors. “We really had no idea how to sell the business. We then received an invitation to attend a BCMS event  at a hotel near Northwich and that was quite good.”

The BCMS approach

After being approached by a handful of buyers, Mike realised that there were certain things they could do to increase the value if the business. “The BCMS approach helped us tweak the business and make it more saleable, which had a beneficial impact on how much we got, who we sold to, and the conditions attached to the sale.”

“Having sold the company now, I realise what it takes to sell a business. But at the beginning of the journey I didn’t have a clue!”

Mike goes on to explain one of their biggest problems: “Compass is not a traditional company. We never did any budgeting or forecasting. It took a bit of guess work, which was grounded by our experience of trading in the past. We did make it difficult for the BCMS business analysts!

“Having sold the company now, I realise what it takes to sell a business, but at the beginning of the journey I didn’t have a clue. BCMS had seen and done it all before, so they were able to impart a lot of knowledge to us which was invaluable. Because of BCMS' input, we were able to re-structure the business right at the very beginning.

Not all acquirers will meet everyone’s expectations. Mike found that, but he felt he had a great BCMS team on his side. He said: “Some of the potential acquirers we spoke to we didn’t quite click with. Some were a great fit but during discussions they opted not to move forward.  Overall, we met with five organisations that were seriously interested and who we felt comfortable moving forward with.

“In the meetings, our Lead Advisor kept everything calm, he added a nice consistent structure to the interactions we had with buyers. Anytime there was any hint of valuation or negotiation on price, BCMS would step in. Our BCMS Lead Advisor really fended off the comments on value and responded proactively on our behalf. It was great to have someone acting as a mediator. We never felt on the back foot in meetings, although there were one or two surprises!”

Selling and running a business

“It wasn’t difficult finding the time to do the preliminaries with BCMS and carrying on running the business. Every now and again we had to go and meet with interested organisations but that was fairly easy to fit in. Largely due to the fact that we had re-structured the company, I wasn’t that involved in the day-to-day activities. So the business could just tick on.

“When it came to due diligence my eyes were completely off the business for a good few months...just the sheer quantity of information that was being asked for, in all sorts of formats. They just kept asking for more and more! There was just no end to the list of things they wanted. Initially I tried to provide everything to as quickly as possible, but in the end I slowed a little because when I sent stuff over they would simply ask for more stuff.”

“The company is the staff. It’s the software that’s inherent as well, but the staff make or break that.”

What happened to the staff?

After the sale, the staff chose to stay on with the business. This was an important factor for Mike during the sales process. “There were a number of companies we refused to speak to and who we would not have sold to simply because we didn’t want our staff to be working for them.

The company is the staff. It’s the software that’s inherent as well, but the staff make or break that. So, we followed BCMS’ advice in keeping the sale completely confidential. If the staff had known what we were doing it might have de-stabilised the company. There wouldn’t have been a company to sell if that had happened. That’s the way we saw it.”

The conditions during the sale

For Mike, the sale price was much higher than he originally expected, but he had conditions he needed to put in place with the buyer as well. “We really wanted to have no conditions attached to the deal – no earn out. Even though that was what we wanted, we expected to be tied in, but as it turned out we weren’t. There were no conditions attached to the sale at all, which we know is unusual. Credit to our buyer for that:  they decided they didn’t need to put any conditions on us to make the deal work.”


“My business partner had no involvement post-sale as he had already extracted himself from the company. I wasn’t involved that much post-sale. I offered to be involved as much as I could but refused a paid role. I didn’t want to feel obliged or that they could push it too far – so I refused to be paid. I did the salaries two more times as it helped them.

“The acquirer had said you are very welcome to visit anytime, but it didn’t feel like the same place once the deal was done. There are various senior people at Compass who still email me from time to time with questions. It was shockingly easy to make yourself totally redundant!”

After the sale Mike has already written a lot of software which is what he enjoys most. He has also been getting into yoga: “I’ve been teaching myself some new things and I’ve been really enjoying it.”



Company name
Compass Computer Consultants
Helsby, UK
Business activity
Computer related services and consulting
Reason for sale
Didn’t want to manage a company anymore
Advanced Computer Software
Compass Computer Consultants