i'm not familiar with the recipe you're trying to use. perhaps you could post it.
however, traditional caramel for flan consists of only 2 ingredients: sugar & water. it's not particularly difficult, but you do need to be careful working with hot sugar. here's how to make it...
1 - start with 2 parts sugar to 1 part water in a pan. probably 2 cups of sugar & 1 cup of water will do it for a family-sized recipe of flan. however, this stuff doesn't go bad and is worth making a larger batch. next to a copper sugar pan, a thin-walled stainless steel is best, not a pan with a thick bottom or sides. towards the end of the cooking, a thick pan will hold too much heat and could cause you to burn the caramel.
2 - you can start of over fairly high heat, or you can take your time and do it over a medium heat. with a brush or a wet rag, carefully wash down the sides of the pan with water to ensure that there are no sugar crystals lingering around which could later cause the sugar to granulate.
3 - start some hot water going in a kettle or other pan and bring it to a simmer by the time the sugar starts to color.
4 - if you have a sugar thermometer, bring the temperature up to a hard-ball or soft-crack stage and then turn down the heat to a low heat. if you don't have a thermometer, you can check by dropping a bit from a spoon onto a saucer. it should be nearing the hardness of hard candy. actually, even if you just lift a spoon of it over the pan, long threads should be forming which will harden. at this point, make sure that the heat is low, as the sugar can go from clear to burnt within a very short time otherwise.
5 - from this point, i'll explain how someone with experience would proceed and then later explain how you can proceed with the utmost safety and still get a perfect product.
a - for your first time, i would suggest bringing the sugar to a nice light
amber color. when it reaches the color you want, take it off the heat and carefully add a few tablespoons of boiling
water. never add cold water to hot sugar, as it can just about explode in your face. with boiling water, it will still bubble a bit, but is safe as long as you don't have you face right in the pan. Gently stir it in with a long-handled wooden spoon, and then add a few more tablespoons of boiling water. for your first time, i would recommend bringing it to a consistency where, when you cool some on a saucer it's at about a soft- or hard-ball stage ( you can make a ball and it will hold its shape). this is useful for a number of uses. while still hot, add 1 or 2 tablespoons to the bottom of each custard cup, or line the bottom of the pan if you're baking the custard in a pyrex or ceramic baking pan.
b - safest way for first-timers
(this will take rather a lot more time): when the sugar has passed the hard-crack stage and has turned about the color you want, immediately take the pan off the heat and place it so it sits in a few inches of cool water, taking care that no water gets into the pan itself. the purpose is to halt the cooking and reduce the temperature to somewhat below the boiling-point of water. then it is safe to add the boiling water and make it the consistency you want.
finally, don't worry too much about the final consistency you get. there's a lot of leeway. you don't want it to be liquid at room temperature, but anything between that and rock-hard is usable. if it's hard-stage, it will all turn to liquid after it's cooked in the flan as long as it's not too thick a layer. sometimes if the hard-stage caramel layer is too thick, some of it may remain undissolved. on the other hand, if it's actually liquid at room temperature, it will get mixed into the flan when you pour in the custard mix. (if you inadvertedly get in this situation, you can chill the cups or pan in the fridge until the caramel sets, and then add the custard mix)
any consistency between these two extremes can be stored for a long time at room temp, and then used by warming it up until it's easily spoonable and flattens out before setting.
warming some up with some cream will give you a nice caramel sauce for sundaes.
good luck and enjoy your flan