SALT LAKE CITY, Utah, May 19, 2004 – The Utah Information Technology Association (UITA) brought together some of Utah’s brightest and most successful legal, accounting, and banking minds to form a panel to address members’ questions on the best practices of orchestrating and finalizing mergers and acquisitions. The event was hosted by Zion’s Bank.

Panel members were: Jeff Jones of Durham Jones & Pinegar; Todd Markus of KPMG; Ron Moffitt of Stoel Rives; Bob O’Connor of Wilson Sonsini Goodrich & Rosati; Don Rands of Thorpe Capital; Howard Young of Jones Waldo Holbrook & McDonough; and the moderator was Tom Stockham of Myfamily.com and the chairman of UITA’s peer-to-peer CEO Forums.

Most entrepreneurs start their businesses with the intention of selling once they get them off the ground and profitable. However, few have the experience of negotiating deals with larger organizations that are interested in purchasing their companies. This inexperience can lead to longer negotiations, frustration and lost profits. The solution the panel gave to combat potential issues during negotiations was to seriously and professionally conduct due diligence.

One of the legal experts suggests that small business owners operate their businesses like they are going to sell them from the moment they open their doors for business by building relationships with attorneys, accountants and brokerage bankers. Then when the time comes to negotiate the “big deal,” all of the key players are in place and they understand the business and its selling goals. This way the transaction will be smooth and the buyers and the sellers will have all of the information to make correct valuations and there will be no deal-breakers revealed at signing.

Another key part of due diligence is the auditing. Too often start-ups sink every dime into product development, marketing and sales, but leave little resources for accounting and bookkeeping. Accounting is typically handled by a spouse or mother-in-law with only an associate’s degree in accounting. Results vary, but more often than not, the founders think the businesses are worth a lot more and are disappointed when the audit reveals a lower valuation of their companies. The island they wanted to buy with their newfound wealth quickly changes to an inflatable kiddie-pool resting inside a sand box.

“Putting proper accounting practices into place from the beginning will alleviate headaches and frustration when it comes time to sell,” noted one of the accounting experts. “Knowing the correct cash flows and net revenues are key during selling transactions.”

In closing, the panel gave the Dos and Don’ts of selling a business.