How to Earn a Finders Fee

by Victoria Duff; Updated September 26, 2017

Finders perform a necessary function for a business by acting as an informal marketing arm of the company. Some finders introduce new customers to a company. Other finders introduce potential strategic partners or investors.

Finders usually charge a finder's fee which is a type of commission for facilitating the deal. Some types of investment facilitation require a license, so the finder must charge a consulting fee based on advisory services and creation of promotional materials rather than receive a finder's fee commission.

Items you will need

  • Finder's fee or consulting contract
  • Appropriate business contacts
  • Negotiation skills
Step 1

Establish an understanding with your client about how you will be paid. It is vital that you have a signed contract detailing these arrangements because you get paid after the deal closes, so clients often dispute the value of your services when they no longer need them. Sometimes industry law requires a license to charge a finder's fee, such as when you introduce an investor. In those cases you will need to be paid as a consultant rather than a finder.

Step 2

Gather your facts. What exactly does your client need in terms of customers, business projects or investment? If you expect to be paid for your efforts, you must provide a professional service. That includes pre-qualifying any potential customers, business deals or investors before you introduce them to your client.

Step 3

Prepare your marketing materials. Sometimes your client will have brochures or business plans for you to use in marketing, but often you will need to create your own, which you tailor specifically to the requirements of your business or investor contacts.

Step 4

Show the deal to your contacts. Find out exactly what they like about the deal and what they would prefer to see. Every bit of information you can gather about the preferences of both sides of the deal will increase your chances of a successful close.

Step 5

Close the deal. Often closing the deal takes the most time since each side will jockey for the best terms. You will earn your fee if you can maintain control and bring the deal to a quick and mutually pleasing close.

Tips

  • Finder's fees range from a fraction of a percent of the transaction amount to 10 percent or higher. Establish the fee schedule prior to committing yourself to the project and make sure you and your client agree on your duties.

Warnings

  • Your greatest danger in working for a finder's fee is a client who refuses to pay even though you definitely deserve it. Many finders do not introduce their resources to their clients until deal closing and an exchange of cashiers checks. It is always a good idea to have a relationship with an attorney who can help you make sure your client pays as promised.

About the Author

Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.