The Finder’s Fees Business – Questions & Answers

Sep 12, 2009 by admin

By Jim Straw.

Question: What is a Finder?
Answer: Most people…..even many of those who call themselves “finders” … don’t really know.

Much has been written and said over the past five decades about the easy-money to be made acting as a “FINDER.” — The fact of the matter is that there ARE easy-money fortunes to be made in this most lucrative field.

Unfortunately, most people do not really know “what” a finder is, or how to start earning Finder’s Fees.

In order to define what a Finder “is,” let’s first point out what a Finder “is not.”

A FINDER is NOT a DEALER — Dealers take-on a product, or service, for continuing promotion and sales. They are responsible for the distribution of a product, or service, from the source to the end user.

A FINDER is NOT a PRE-SELLER — Pre-sellers accept a selling price from a product source, add-on what they feel to be a fair margin of profit, and sell the item. After they make a sale, they buy the product and ship it to the buyer.

A FINDER is NOT a REPRESENTATIVE or AGENT for either the buyer or seller. — Representatives & Agents are empowered by theirclients to negotiate the purchase, or sale, of specific products or services. — They can legally sign documents obligating their clients.

Too many “supposed” Finders are not really Finders at all — they are Salesmen, Agents, Representatives, and/or Pre-sellers.

A Finder is nothing more than a “match-maker” for a fee. The professional Finder simply matches QUALIFIED buyers with
QUALIFIED sellers, or vice versa…..then steps back while they (the principals) do their deal.

Finders DO NOT sell anything; except their knowledge.

Finders DO NOT negotiate anything; except their own fees.

Finders DO NOT add-on their profits.

The moment you try to “sell” something, or “negotiate” a sale, you are NO LONGER A FINDER. – A finder ONLY “introduces” two qualified persons (a buyer & a seller). It is then up to the seller to “sell,” and the buyer to “buy.” As a finder, you can do neither.

Under the law, as long as you do not sell or negotiate for a sale, you are NOT a broker or agent. Therefore, you do not have to have any broker/dealer/agent licenses. But … you MUST ACT ONLY AS A FINDER – nothing else!

Question: Why would any company pay a Finder’s Fee?

Answer: There are over 300,000,000 people in this country — and millions of businesses (small, medium & large).

Can any business know of ALL of the sources of supply, potential buyers, or providers of necessary services? — Not on your life!

Why should a company spend thousands of dollars, and tie up essential employees to do nothing but research the existence of those suppliers, buyers, and providers — when they can easily have a Finder go to the expense and trouble of locating the contacts they need. And, these fees are considerably less than what they would have spent if they had done the research themselves.

I’ve had a great many beginning and amateur finders (those are the ones that never earn a fee; don’t get paid, so, they are amateur) complain to me that they have to weed-through hundreds of unqualified leads before they find one good, solid contact. They insist that this wasted energy keeps them from earning their fees.

My friend — if it was too easy, no one would have a need for a finder, or even consider paying a Finder’s Fee.

A Finder EARNS his (or her) fee by weeding-through the flakes and unqualified leads; by following all of the dead-end paths; and by, eventually, putting his hands on a real, honest-to-goodness source, buyer, or whatever. — THAT is what a Finder gets paid for doing.

A company, or individual, who pays a Finder’s Fee, pays it so they won’t have to chase down all of those unqualified leads, blind alleys, and dead-ends.

They pay Finder’s Fees to SAVE MONEY!

Question: What is the difference between being considered a “broker” as opposed to a “finder?”  I am eager to start this business and feel I would do well, but I am concerned about the definition.  One definition I found for broker was someone matching a buyer and a seller.  That’s a broad definition but in the following sentence it stated that most states require you to have a broker’s license. Can you assist me with this?

Answer: In the business community, a “broker” is authorized to “make deals” in the name of the seller.  An “agent” actually represents the seller as if that agent were the seller.

A “finder” never  makes deals or represents anyone.  The finder … like a marriage  matchmaker … only introduces the parties and receives a fee only if the parties make a deal between themselves … just as a marriage matchmaker only gets paid when the couple marries.

Question: As a Finder, what should  I charge for my services to clients?

Answer: You don’t charge them anything.

Ask them what they will pay.  If it is too low, negotiate.  If they won’t make it worth your time and effort,  move  on to another deal.

If they offer more than you expected, keep your mouth shut.

Question: I just don’t understand. Why do the sellers/buyers need me to find the great deals on products?  What’s keeping them from cutting out the middleman and doing ther own searches for closeouts.  It seems that any business person would be doing that.

Answer: There are millions upon millions of businesses in this country.  Not one of them can know about all of the available sources for their wants and needs.

Paying salaried people to locate sources is NOT cost effective.  Finders only get paid when they find what is needed; saving the business money.

And  …  with  all  the responsibilities a business owner has, his/her time is better spent selling and managing.

Question: I was wondering if you had a ‘template’ contract for a finder’s fee. — I used to work at an  M&A firm, and believe me, they had the sellers and buyers sign a contract agreeing they will pay a fee if their company gets bought or sold. — They had a public company try to renege on paying a $400,000 commission, but after the judge saw the contract and paper evidence, he awarded the M&A firm 400k of the company’s stock. — An oral agreement or meeting of the minds won’t hold up in court. — Their contract was a standard contract, but had spaces for obviously the buyer or seller, and a little other information. — That’s why I thought you might have something similar, or some guidelines. Or do I have to design one from scratch? — Surely you used some when you did this line of work? — I’m no longer with the M&A firm, I don’t have the financial skills to complete a merger, but I’ve found buyers and sellers and have matched them, which is what appealed to me about your book.

Answer: In the M&A field there ARE acceptable “template” contracts – but – there are more finder’s fees made in other fields.

In my course, Straw’s First Law is … “Put it in writing.  Get it in writing.’ — Therefore, an exchange of written letters (not FAX; or email) wherein the conditions of the fee are spelled out and accepted by both parties IS the contract. — As a matter of fact, I earned a number of M&A finder’s fees without a ‘template’ contract; just a meeting of the minds expressed in duly written and accepted letters. — “Oral” agreements are NOT acceptable in any way, shape or form.

A ‘template’ finder’s fee contract usually gets tossed into the round file unless the parties have actually reached a meeting of the minds prior to its issuance. — Unfortunately, in most cases, the beginning finder comes across a ‘template’ contract and sends it out willy-nilly expecting someone to sign it and return it without knowing the finder or having any idea what they may have. — That is why I do not use; nor recommend the use of, ‘template’ contracts.

Question: I would like to know how can I promote my Professional Finding Service, on the internet for the most exposure spending the least  possible money or no money at all. — I would need something easy to understand nothing complicated so I can start.

Answer: Actually, promoting any kind of “Finding” service is difficult because people don’t even know they need your services when you tell them about it. — The best bet is to “find” something … then “find” the people who might need it. — No easy, cheap way that I know of.

**Jim Straw’s – Finders Fees Course**

Online Mentor Magazine – September 2009