Finder’s fees have a suspect reputation. Mergers, real-estate deals and myriad other business transactions big and small have gone wrong over disputes about them. But if your company needs an unusual piece of equipment, a discontinued spare part, or capital when the bank won’t come through, a professional “finder” may be just the person who can get it for you.
“Most businesspeople do it inadvertently. They just don’t consider themselves to be a finder,” says J.F. (Jim) Straw, author of the self-published Finder’s Fees and a Cleveland, Tenn.-based veteran of almost 40 years in business of finding things for people. “Finding” isn’t really an entrepreneurial activity, Straw cautions: “Most finders get started because they know someone who has something, and they know someone else who needs it.”
In fact, “finding” is one of the world’s oldest professions. Traditional Jewish yentas have been matching mates for a fee since biblical times. In modern Europe and the Middle East, professional finders ply their trade even among larger businesses. Arms-trader Adnan Khashogi is said to have begun his billion-dollar fortune as a young finder for oil-rich sheiks. Though the practice might have a sullied reputation in America, old hands such as Straw estimate there are several hundred professional finders in the United States.
“Finder’s fees are more of a personalized service than anything else. It’s not a business, per se,” according to Straw. “It’s strictly catch as catch can.” Businesses hire finders to save time and money locating otherwise hard to locate items. There are unscrupulous operators, as in any business. To steer clear of them while still taking advantage of a valuable service, Straw and other advise:
- To find a finder, advertise a fee. Finders aren’t usually listed in the Yellow Pages. Place a classified ad in your nearest metropolitan daily, and specifically note your willingness to pay a fee. “There’s a finder reading every publication in the world,” Straw notes. Use the term “fee” only if you want to attract a finder. Conversely, a finder offering to locate something will suggest a commission, but never a fee.
- For a request that doesn’t need to be filled right away, you might consider placing a notice in the Finder’s International Network Directory, published by Ron Wyatt in Memphis, Tenn. The eighth edition of the directory lists several hundred opportunities each year. “I guess the best sign that people are satisfied with it is that we don’t get any returns,” he says, noting he offers a money-back guarantee on the directory. Wyatt, an assistant city attorney for the city of Memphis, and his wife, Peggy Birmingham (also his editor) welcome calls from readers in need of informal finding advice.
- Don’t pay up-front money. “The act of finding is bringing together two people, then stepping back,” says Tyler G. Hicks, publisher of International Wealth Success, a 33-year-old monthly newsletter for start-up opportunities. Bona fide finders get paid a fee from the buyer only after he or she has agreed to purchase from the seller.
- Treat the finder as you would any other contractor. Write an agreement, spelling out exactly what you’re looking for, how much you’re willing to pay, what will be the fee, and any other stipulations (conditions of the merchandise, time limits and so on). Pay the finder’s fee only after you’ve checked out the seller and satisfied yourself the found item fits you needs.
- Consult with an attorney or your accountant about any potential legal or tax ramifications of a finding transaction. Some items may be taxable; others may require regulatory clearance. Don’t expect the finder to deal with these considerations. “The only time that a finder gets in trouble is when they inadvertently or otherwise cross the line and become an agent or a broker,” Straw says.
While business owners are more likely to use a finder than to become one, anyone can be a finder. You don’t need a license. You do need to be:
- Inquisitive. According to Wyatt: persistent (Birmingham could average 30 phone inquiries to find one item, her husband notes.)
- Curious.
- Good on follow-up.
- Detail-minded and precise.
- Willing to accepted repeated rejections.
Straw’s book, Finder’s Fees, spells out how to get started in the business.
