I answered a question on Hacker News that comes up in different variations at many breakfasts. I thought I would post my answer here as well. See the full question at “Can I continue to be a freelancer for life?”
Q: I am a freelancer full time. Is it a good plan to continue as an independent coder, learning new skills as I go, for life?
It’s a significant challenge as a solo consultant to build a sustainable business: you have only your hours to sell, it’s difficult to stockpile them, and jobs arrive unpredictably. When you are busy it’s hard to look for additional work, so that porpoising (alternating periods of work and idleness) is hard to avoid.
I would look to join up with another two to four like minded consultants. This gives you an opportunity to spread out your marketing and sales efforts across the group, take on larger assignments, and have backup in case of illness or other temporary inability to complete the job.
Partners also give you time to renew and enhance your skill set–obsolescence of expertise is another business level risk–and others to compare notes with in new or challenging situations.
When it comes to selecting who would be a good partner, shared values and work ethic are the more important criteria in my experience.
Also, having tried it several different ways, I would develop a business partnership based on shared business successes (vs. friendship, desperation, or other non-business experiences) by dividing the income stream–and managing expense–from a series of projects. This is a reliable way to judge what it will be like to manage a business jointly.