10 red flags that shout 'Stay away from this project!'

Like most consultants, you've probably gotten stuck on a doomed project at one time or another. But if you know what to watch out for, you can avoid getting mired in a project mess.

Over time, I have been involved in some of the worst projects ever as a freelancer, consultant, or some other "non-employee" relationship. When you are a direct hire to a company, you do not have the freedom to pick and choose what you work on. But as an outside person being paid to work specifically on one project, you do have the choice. I have been burned so many times it isn't funny, but I have learned a lot from my mistakes. Here are 10 of the biggest red flags I've encountered. I am sure you have more to share in the discussion thread.

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1: No clear spec or goals

All too often, I've been approached to work on a project, but the person trying to arrange the deal can't tell me what they really need done. It's not that they are under some strange code of silence. They really have no clue what they want. They have a general idea of what the finished product should look like and a really good understanding of its differentiating factors or killer features, but outside of that they have not thought it through. This is one of the most common and most significant danger signs! How many hours' worth of work do you want to throw away on a regular basis because the client realized after you built it that what they asked for wasn't what they needed? At the very least, these kinds of projects should be contracted only at a per-hour rate.

2: Funding problems

Are you being offered to be paid a percentage of revenue or paid over time? If so, that is a warning that you probably won't get paid at all. It's not that they intend to rip you off, but a company that can't afford to pay cash on the barrelhead probably lacks the financial power to get the job finished. Even if you get the project completed, they are still going to be struggling to come up with a marketing department, hire a support staff, and so on. Sure, giving someone a slice of the pie is a good incentive. But the only way to make that work well is to pay people and offer stock options in addition to their pay.

3: Product pre-sold to a client

One of the worst mistakes companies make is pre-selling a product to a client. All too often, the customer saw some fake screenshots of an application that didn't exist and wrote a check. Now, you are being asked to bail out your customer because they sold vaporware. You'll be under the gun the whole time on a project like this. The end customer has (rightfully) certain expectations on functionality and timelines. Meanwhile, no one has even determined whether the functionality can be done (a lot of it probably can't be done reasonably well) or whether the timeline can be met (it can't; I guarantee it). Stay away from this project! Do you really want to do business with the kind of client who sells something that does not exist yet? And do you really want to have the pressure of rescuing them on your back?

4: Spending money in the wrong places

Here's another bad scenario: The customer has a snazzy logo and a gorgeous Web site but no product yet, and they want to cut your rates to the bone. What does this tell you? That their spending priorities are in the wrong spot. A client who seems to have all of the marketing in the world but no ability to actually produce a product is a dangerous client. Why? Because if they have limited funds to begin with, they've been spent on the sizzle but they forgot to buy the steak. Another very real concern is that a client who is so marketing focused will have a tendency to sell the product before it's ready to be sold, which we know leads to disaster.

5: A long string of previous consultants

Has the client had two or more consultants already working on this project? If so, it's likely that there is something very wrong with it. Ask them why the previous consultants are gone. If there is a lot of hedging, that is a bad sign. Sometimes when you ask about previous consultants, the client badmouths them: "They were all a bunch of jerks who cared more about sending bills than doing work" or perhaps, "They sold us a bill of goods and didn't deliver." While this is often the case with consultants (we all know bad consultants are out there), it is also how a bad client often perceives a consultant that can't fulfill unrealistic demands or assumptions. Another problem is that you don't always want to come in behind other workers who may have left in a hurry over a billing dispute or other issue. Chances are, the documentation is nonexistent and the work is a disaster.

6: The wrong workers

One of the worst situations I have seen is a client who has been trying to get a group of college students (or worse, high school students) to do the job. Usually, after the project has dragged on forever and nothing real has been accomplished, the client starts looking for a true professional to fix the mess. Of course, they've lost a huge amount of time and spent a fair amount of money on the amateurs. This is usually only a problem with the smallest companies, luckily. These kinds of situations stink, because the client is already behind schedule and over budget, and if they really were able to pay a pro, they would have done so since Day 1. The sure sign of this scenario is a warped vision of pay scale reality. When they offer you a per-hour price worthy of "Would you like to gigantic size that?" you know you are being asked to replace a part-timer who is new to the industry.

7: "Good buddy syndrome"

"Good buddy syndrome" (GBS for short) is when a customer has a close friend or relative they trust and take advice from who you will never get to meet to refute. Usually, these good buddies have no clue what they're talking about. For example, the project's specifications make it clear that you really need to use a product that costs a bit of money, but then good buddy insists that freeware product XYZ can be made to work if you put enough effort into it. After you do the work the way good buddy says it should be done, your bill is bigger than the purchase price of the product you spec'ed would have been, and now the project is behind schedule, too. Sadly, GBS is usually hard to detect until you are actually working on the project, but sometimes there are signs you can see in advance. For example, you can ask the client if there is anyone who advises them from time to time or if they have someone they trust on technical matters who isn't at the table. If they say "yes," try to meet that good buddy and find out whether they can keep their distance or offer useful advice -- or whether they will be interfering in a negative manner from afar.

8: Lack of experience

All too often, a "client" is really just one or two people with little experience in running a project or a company that has an idea for a product. These clients are usually the most forgiving in terms of understanding that you are a freelancer who has other clients and maybe even a day job. But they also tend to lack the things you will need to do your job well and get paid. For example, they may not have a stable money supply or will be counting on an unrealistically high revenue stream in the beginning to fund continued development. If you are doing business with an inexperienced client, you will need to be extremely diligent when making up your mind to work with them. Due the same level of research that an investor would do, because by taking them on as a client, you are essentially investing in their project.

9: Hostile employees

Sometimes, a company will bring in a consultant whom their employees do not want to be there. Perhaps the employees are concerned that their jobs will be lost or maybe they wanted to work with the technologies you are being asked to implement. Maybe egos are bruised or perhaps the employees are simply against the project entirely, regardless of who is doing the work. No matter what the root cause is, taking on a contract where the full time employees do not want you there is always a challenge, and the pay usually does not justify the hassle. It is pretty easy to spot these situations; there will be one or two people constantly sniping or making sarcastic remarks, there will be an edge of constant tension on phone calls, and some people will be challenging your abilities in public. Unless this is a project that is critical for your long-term survival, you should avoid this scenario whenever possible.

10: The "skunk works" project

Once in a while, an outside consultant will be used by a department as a "solution" to an internal political problem. For example, the IT department might refuse to tackle a project, so the stakeholder decides to use operational budget to bring in a consultant to do it anyway. This kind of project combines some of the worst red flags listed above into the mother of all debacles. First of all, there are not just hostile employees (#9), there are usually entire "hostile departments." The project is officially off limits. Next, you have a budget problem (#2); the project has not been specifically budgeted and never will be, due to the official resistance to the project. On top of that, the stakeholder wants to get you in and out as quickly as possible, because they have no idea how long they can get away with having you working on the project. Of course, there is going to be a total lack of planning (#1) because this was never a fully thought out project to begin with. All said and done, this is a bad situation you want to steer clear of.