I'm a freelance developer who started over 20 years ago. I need to improve my ability to avoid clients that can be considered a bad use of my time. So I'm asking you (developer or not): what is the most important consideration that you keep in mind when a new client knocks on the door, to decide whether you'll accept them or not?
In short, how do I know when a customer is not worth my while?
I'm in web development myself, my answers:
If money seems to be the only important thing, or you're being compared to India
I've frequently had discussions with potential customers that in the end boiled down to that they didn't like our rates, either because "competitor X is 10% cheaper" or "I could outsource this to India for half your price". On both cases I move into arrogant mode, and ask whether they like to invest in top quality for a high rate, or low quality at half the rate, taking twice as long to not deliver what you want. Never, ever, get into a bidding war with these customers if you don't absolutely need them, believe in your product and let them decide whether to choose end product quality over a bit of discount or not.
Same goes for if the client is requesting offers from more than 2 competitors - that's an absolute red flag for me. I've heard customers tell me they requested 9 offers, but no one can evaluate that many offers on quality. Customers like that only care about the price, so they'll be whining about every invoice you'll ever send.
If you don't believe in the client's business
If you don't think they have a chance to succeed, you should be honest about that. If they can't convince you otherwise then, steer clear. Don't ruin your own reputation by becoming the guy that 'ruined a company by sending them invoice after invoice for a failed product'. They will try to blame you for their failure, it's human nature.
If the client has no technical knowledge whatsoever
Again, this means fighting about every invoice if they don't understand the complexities of the product. Customers like this only see that Facebook works, not the thousands of man hours involved, and will expect you to replicate that in a few days 'because you know this kind of stuff'. They hire you to be the expert, but they should know at least enough to appreciate your work, or it's going to be drama at one point or another. They don't need to know everything about your job, just enough to appreciate why they're paying someone else good money to do it for them.
If the client doesn't respect me during the bidding process, the client is not worth the trouble.
Drama during the bidding process is a huge red flag. In general drama in the bidding process is a sign to walk away and not even bid.
Chances are, if the project starts off this way, it will be stressful all the way through and everyone will end up unhappy.
If the client doesn't know what they want, their business model is implausible, or if they seem to have unrealistic expectations that is a huge red flag for me.
In each of these cases, the customer is likely to have expectations which cannot be met, and the project will end up in the swamps.
If the client is overly disorganized, and business processes are a mess, chances are other problems will occur as time goes on.
Now this one may be more specific for me since I am automating business processes, but the principle can generalize out a bit. Software supports business processes, not the other way around. You don't want to automate bad business processes, design a spiffy website around an unclear message, or the like. In these cases everyone will leave unhappy.
The first thing I look at is are they willing to pay what it really costs. Don't be afraid to give a price higher than a competitor if it is what it costs to do it right and don't be afraid to walk away from a deal if they continue to push for a lower price because of the low baller.
The most extreme example I have was one with a company that wanted to start a real estate listing service. They had a variety of advanced features they wanted to implement and I approximated the platform they wanted would take about a year to implement at a cost of $150,000 or $50,000 and a 10% stake in the site.
They had someone come in and say that they could build the system they wanted for $5000 and no stake in 2 months. After trying to explain to them why that wouldn't work they still wouldn't listen, so we cut them loose. 8 months later when their site finally went live, it was nothing more than a glorified Drupal site with some basic, slow and broken plugins applied to it.
We were absolutely right about the problems they would face and absolutely right about what it would cost to do it right, but they were not interested in hearing it and had we decided to try to meet them even part way, we would have been faced with a client that was constantly complaining about how long it was taking and how much it was costing and thinking they should have gone with the 5k option.
If they have a reasonable idea of the cost and effort required. The next thing is to make sure they have a solid plan for how to make use of what they want built and have documented (or are willing to have an initial project where you help them document) exactly what is needed. Missed expectations, while potentially fully reasonable from your perspective, are one of the biggest things that can cause problems for your reputation and for the health of a project.
Even if they have millions to throw around, if you don't believe what they are doing is going to be of benefit to them, walk away. It isn't worth the hit to your reputation for them to have a product that they aren't happy with because it didn't meet their unrealistic expectations of what it could do.
Similarly, if they don't have a clear cut understanding of what they need and what it will take to get there, then missed expectations along the way (particularly for larger projects) can result in a loss of faith and a painful breakup of the project with bad feelings and lost money all around.
Following are things I would keep in mind and avoid doing
Accept a project where client sets a deadline (Unless they are from technical background): 100% of Projects that I have worked where a non-technical client had set a deadline ended up being bad (Learn to negotiate deadlines and schedule my fellow developers) . The ones that had technical background had better sense of what they want, because they have been there and done that.
Accept a project where client offers only equity: I have worked on projects where clients offered me (dis)proportional equity only. Yes monetary factor to it, but when a client doesn't offer you money for you effort it implies lack of commitment from their end for the project.
Accept a project where client doesn't negotiate on price: Chances are you're quoting too low. Learned this lot later that I should have. Start charging decent amount, have good justifications on doing so.
If you need to chase your client for small things, even from the beginning (e.g. signing a contract, because you need a file, to be called back by phone,...), in my experience is a sure red flag: imagine when you'll ask to be paid.
Sentences like "trust me", "I'm honest", "we don't need a contract", "we have not problem in paying you more if you deserve it", brought me to sue all theese super-loyal-clients...
Sometimes the client told me how the work (site/software/ecc.) I have to update has been done in the worst way possible from a previous freelancer (maybe this correspond to the "drama" part in the post of Chris Travers). At the end the client tryed to recoup the bad investment, so he was never happy in spite all my efforts and discounts. When finally he was happy, I recognize I had worked nearly for free.
The first lesson I learned as a freelancer is to ask "what's your budget? very early in the process -- "
Most prospective clients will hem and haw, and refuse to answer, either because they don't have a clue what things cost or because they're afraid to throw a number out when you might come in with an estimate that is much lower.
At that point, I explain that I can offer a range of solutions ranging from $X to $XXXX, noting a few major variables that impact project cost. But I can't propose a solution that fits if I don't know how much they want to spend. Then it's back in their court.
If they don't have a budget, don't know how much they can spend, or just won't give you a number, move on. You'll avoid people on fishing expeditions AND you'll avoid clients who do't know what they're doing.
