Earn Money with Finder's Fees: Get Paid for Work You Don't Do

Table of Contents

1. Introduction: What are Finder's Fees?
2. How to Make Money with Finder's Fees
   • Generating projects and clients
   • Definition of finder's fees
   • Example of a finder's fee arrangement
3. When to Use a Finder's Fee
   • When you don't have the expertise
   • Finding someone who can do the job
   • Choosing between finder's fee or partnership
4. Setting Up a Finder's Fee Agreement
   • Starting the conversation
   • Working with a lawyer or using online contracts
   • Negotiating the terms: percentage, payment frequency, and contract duration
5. Non-Compete Agreements: Protecting Your Interests
   • The concept of non-compete agreements
   • Using subcontractors under your agency
   • Setting the duration of the contract
6. Pros and Cons of Finder's Fee Agreements
   • Pros: mutual benefits, more work for vendors
   • Cons: trust issues, difficulties in tracking payments
7. Conclusion

💡 Highlights

• Finder's fees are a way to get paid for sending other people work.
• You can use finder's fees when you have a project or client that you can't handle yourself.
• Setting up a finder's fee agreement involves starting a conversation and creating a legally binding contract.
• Non-compete agreements can protect your interests when working with subcontractors.
• Finder's fee agreements have both pros and cons, including mutual benefits and trust issues.

💼 Introduction: What are Finder's Fees?

Finder's fees are a form of compensation that allows individuals or businesses to earn money by connecting others with project work or clients. While actually doing the work can be challenging, finding the work in the first place can often be even harder. Finder's fees serve as a way to reward those who bring new business or projects to the table.

💰 How to Make Money with Finder's Fees

Generating projects and clients is the key to making money with finder's fees. The goal is to find someone or a company in need of a specific service that you are not able to provide yourself. By connecting them with a suitable vendor or service provider, you can earn a percentage of the billable fees generated through that project.

Consider the following scenario: Suppose you have a client who is a celebrity chef looking for PR work. Although your agency does not specialize in PR, you have a network of PR consultants you can refer your client to. By making an arrangement with a PR consultant, you can receive a percentage of their billable fees if they are hired to do the PR work for your client.

🤔 When to Use a Finder's Fee

Finder's fees are utilized when you have developed a piece of business or have a client who needs a service that falls outside of your expertise. In these situations, you need to find someone who can provide that service. By connecting the client with an external vendor who is essentially getting work out of the blue, you can negotiate a finder's fee as compensation for facilitating the connection.

There are three options when referring work to a vendor:

1. You can refer the work for free, building good karma and maintaining a positive relationship.
2. You can forward the work without expecting a finder's fee if you have a close relationship with the vendor.
3. Alternatively, you can use a finder's fee arrangement where the vendor works independently with the client and pays you a percentage of their billable rates.

📑 Setting Up a Finder's Fee Agreement

To set up a finder's fee agreement, you should begin with a conversation with the vendor you plan to refer the work to. Explain the project, emphasizing that it will be a great billable opportunity for them. Ask if they would be interested in engaging in a finder's fee agreement with you. If they agree, it's time to move forward with a legal contract.

Working with a lawyer or utilizing downloadable contracts available online can help ensure that the terms of the finder's fee agreement are correctly stipulated. The agreement should include the names of the parties involved, the percentage of the fee to be paid, the frequency of payment, and the duration of the contract.

Typically, finder's fees range from 10 to 20% of the billable fees, and the payment can be set on a monthly, quarterly, or yearly basis. The agreement should clarify the duration of the contract, which can be negotiated based on the specific needs of the project or the parties involved.

🤝 Non-Compete Agreements: Protecting Your Interests

In addition to finder's fee agreements, non-compete agreements may also come into play. These contracts are designed to protect your interests when working with subcontractors who may have direct contact with your client during a project.

Imagine a situation where you partner with a subcontractor for a project, introducing them to your client. The subcontractor may have interactions with the client and potentially gain future work directly. A non-compete agreement ensures that any work related to the project must go through your agency and that the subcontractor cannot bypass you and work directly with the client.

The non-compete agreement typically specifies a duration during which the subcontractor cannot work with the client directly, ensuring that you are involved in any future work or payments related to that client. After the specified period, the subcontractor can work directly with the client, and you will no longer be entitled to a percentage.

✔️ Pros and Cons of Finder's Fee Agreements

Finder's fee agreements offer several advantages. One significant benefit is the ability to earn money by referring work, even if you cannot directly provide the services required. It fosters mutually beneficial relationships between parties, allowing vendors to gain more work and being compensated for your role in generating the business.

However, there are also potential downsides to consider. Finder's fee agreements require a level of trust in the vendor, as you may not have direct visibility into their work or billable rates. This trust is essential to ensure that you receive the appropriate payment for your referral. It can also be challenging to track the progress of projects and collect payments, requiring you to proactively follow up with both the vendor and the client.

🎯 Conclusion

Finder's fees can be an effective way to monetize your ability to connect individuals or businesses with specific services or projects. By understanding the process of setting up finder's fee agreements and non-compete agreements, you can navigate this aspect of business and foster beneficial relationships with vendors and clients. While trust and tracking payments can pose challenges, finder's fees offer a mutually beneficial arrangement that can lead to long-term partnerships and increased business opportunities.

FAQ

Q: Are finder's fees legally binding? A: Finder's fee agreements are legally binding contracts that specify the terms of the relationship between the parties involved.

Q: Can I use finder's fees in any industry? A: Finder's fees can be used in various industries as long as there is a need for external vendors or services that you or your company cannot provide.

Q: Can I negotiate the percentage of the finder's fee? A: Yes, the percentage of the finder's fee is negotiable and can vary depending on the specifics of the project and the agreement between the parties.

Resources:

• Philip VanDusen's website