It seems like you're getting squeezed because you haven't stayed with the market. I've seen companies advertise template sites for as little as $100. The sites are all customizable via a WYSIWGY interface. They are also hosted for a small monthly fee because none of them will be a huge burden on the ISP. As a result, this space is moving to more automated, but non-distinct sites.

Are you creating a similar setup? Are you able to compete by having a site made for $100 in under an hour? If not, you can still make money in this space, but you're going to have to be high end. Your clientèle will have to be high end. They will have to be willing to pay high end prices too. And let's not forget that there are many competitors aiming for this exact space. What differentiates you from them? Can you buy/merge with them? All things to consider.