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Author Topic: Question about Finder's Fee for gigs  (Read 2562 times)

Gordon Brinton

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Question about Finder's Fee for gigs
« on: September 18, 2015, 07:51:19 am »

A local soundman and friend no longer works much and does not currently have a complete system to hire out. Anyway, when a client called him a few months ago, he referred the client to me which resulted in my getting a nice gig that went very well. This soundman did ask me up front for a $100 finder's fee which I ended up paying. During the gig, the client asked for my business card and said that he may be calling me directly for more work.

Fast forward one month...the same client has more work. However, because he had lost my business card, he called the same soundman (mentioned above) and asked for my number again. Now this soundman is asking me for another finder's fee. What do you think? Am I obligated to keep paying his fee every time this client hires me? Furthermore, are there any rules about such fees in the US or is there an industry-standard percentage that we should be following? Have you guys ever paid it?
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Bob Leonard

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Re: Question about Finder's Fee for gigs
« Reply #1 on: September 18, 2015, 08:03:55 am »

There is no standard for this type of "generosity". Be thankful that you were called, give the guy $50 for his effort, and stay in touch with the venue. Nothing works better than letting your customers or potential customers know who you are and what you can do for them on a regular basis.
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Dave Dermont

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Re: Question about Finder's Fee for gigs
« Reply #2 on: September 18, 2015, 09:01:47 am »

A local soundman and friend no longer works much and does not currently have a complete system to hire out. Anyway, when a client called him a few months ago, he referred the client to me which resulted in my getting a nice gig that went very well. This soundman did ask me up front for a $100 finder's fee which I ended up paying. During the gig, the client asked for my business card and said that he may be calling me directly for more work.

Fast forward one month...the same client has more work. However, because he had lost my business card, he called the same soundman (mentioned above) and asked for my number again. Now this soundman is asking me for another finder's fee. What do you think? Am I obligated to keep paying his fee every time this client hires me? Furthermore, are there any rules about such fees in the US or is there an industry-standard percentage that we should be following? Have you guys ever paid it?

I have a client who gives me a few jobs every year at faith-based summer camps in my area. I do not have my own system. I rent from a local company with which I have a long standing relationship. The company I rent from does a lot of bar-band work, and I know I am paying them a lot more than what they are used to getting, along with additional income for back line rental.

They also cover gigs for this client when I am not available. At one of these gigs, the venue (not my client) asked about renting a system for another event a couple weeks later. The company owner booked the gig, and offered me first refusal to work it, when he could have easily not mentioned it to me at all, and just do the gig himself. This is all part of our relationship, which has developed over many years of working together. We enjoy working with each other, and try to do it as much as possible.

The answer here is deciding what kind of relationship you want to develop with this sound guy. Is there room to throw him a bone? Does he have other people who might call him with work he can refer to you? Are there other people he can call?

Consider these finder's fees an investment. Only you can decide if the investment is worth it or not.
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Scott Carneval

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Re: Question about Finder's Fee for gigs
« Reply #3 on: September 18, 2015, 09:04:54 am »

Is there a potential for this guy to continue sending you leads? If so, it's probably not worth burning a bridge. 

The most important question though, is what is this job actually worth to you.  It doesn't matter what the gig pays, what matters is how much PROFIT you make after all expenses, including depreciating the equipment and paying yourself for your time.  The easiest way to calculate this is to determine what it would cost you to hire someone else to do the gig in the event that you can't make it.  If it's a $2500 gig, and you could hire someone to do the gig for $2k, then the gig is worth $500 to you.  Now you have to decide if it's worth paying $100 to make $500.  In my opinion, it is. 
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Tim Tyler

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Re: Question about Finder's Fee for gigs
« Reply #4 on: September 18, 2015, 12:30:20 pm »

Gordon -

- Assuming in the second case the client actually wanted your friend's soundco and then asked for you as "next best"... I'd say pay, maybe negotiate a commission agreement for future gigs...

In the first case, your fellow soundman referred you to a job he could not fill, a good reason for his getting a commission.  In the second instance, if the client merely asked for your contact information, for which your buddy figured was worth another c-note... I'd pay this time, and then make sure you establish a relationship with this client making sure you are easy to contact. 

I don't advocate "back-dooring" your fellow soundco, I would be up front with your pal about the situation.

-Tim T
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Matthew Knischewsky

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Re: Question about Finder's Fee for gigs
« Reply #5 on: September 18, 2015, 04:23:10 pm »

A local soundman and friend no longer works much and does not currently have a complete system to hire out. Anyway, when a client called him a few months ago, he referred the client to me which resulted in my getting a nice gig that went very well. This soundman did ask me up front for a $100 finder's fee which I ended up paying. During the gig, the client asked for my business card and said that he may be calling me directly for more work.

Fast forward one month...the same client has more work. However, because he had lost my business card, he called the same soundman (mentioned above) and asked for my number again. Now this soundman is asking me for another finder's fee. What do you think? Am I obligated to keep paying his fee every time this client hires me? Furthermore, are there any rules about such fees in the US or is there an industry-standard percentage that we should be following? Have you guys ever paid it?

IMHO:
Picking up the phone and giving someone a phone number should be a common courtesy, especially if this person is a "friend" and is mostly out of the business. For $100 on a lounge level gig I'd at least hope they would sort out the schedule, advance with the performers, make arrangements for with the client for payment…in essence "do something" worthy of $100.

If I had to put a dollar value on it, a referral is worth 1-2% of the profit.

Matt
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Tom Roche

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Re: Question about Finder's Fee for gigs
« Reply #6 on: September 18, 2015, 05:06:19 pm »

I understand the importance of not burning bridges, but would be a little ticked if a "friend" asked for another finder's fee for simply passing on your phone number to the same client.  He didn't find another gig; he's really holding the gig hostage until he gets a cut.

Anyway, I might be inclined to do what Bob suggests and negotiate it down to $50 and stay in touch with the client.
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Jeff Bankston

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Re: Question about Finder's Fee for gigs
« Reply #7 on: September 18, 2015, 06:06:40 pm »

I have told people I know about jobs and other stuff they were looking for over the years. A few offered me a finders fee for finding it but I turned it down. I have also had been told about stuff I was looking for and no one ever asked me for a finders fee.
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Bob Leonard

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Re: Question about Finder's Fee for gigs
« Reply #8 on: September 18, 2015, 08:54:12 pm »

Keep in mind that established relationships work as already pointed out by Dave. A large number of small soundco's working together can be the equal of one large soundco working alone. I don't burn bridges unless the other party starts the fire, in which case all bets are off.
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BOSTON STRONG........
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Scott Olewiler

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Re: Question about Finder's Fee for gigs
« Reply #9 on: September 19, 2015, 09:10:25 am »

In this particular situation I'd wait it out and see if the client finds you on his own.

You have a web presence right? If he searches for sound system rentals in Harrisburg you're on the first page. Hopefully he remembers the name of your co.

I get  1 or 2 calls weekly for gigs I can't do and I always try and give the caller the name of another company. I've never, nor would I ever consider asking for a finders fee. I don't even do the "Tell them Scott sent you" bit. I just give them the info.

I figure the client might remember I'm the guy who helped him out by referring someone who could meet his need.  Maybe that means he'll call me first next time (which has happened numerous times now) or maybe he'll develop a relationship with the other company. Doesn't matter to me. I turn down almost as much work as I take.

In our area there seems to be lot more work than there are guys to do it.

BTW Gordon, since we're really close, PM me with the type of gigs you're interested in doing and I'll start sending people your way. FYI, most of the stuff I have to turn down is last minute equipment only rentals, where I'm already doing more than one rental on the day they need it and I'm literally out of gear.  I average 4-5 calls a week but only take about 8-10 jobs a month.
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Re: Question about Finder's Fee for gigs
« Reply #9 on: September 19, 2015, 09:10:25 am »


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