I must admit my big difficultly when trying to get this balance right is saying no to client work in order to have time to develop the product. It can be incredibly hard to say no to a few $ when you have no guaranteed income.
If you are saying yes to too many clients, increase your rate. Repeat this cycle until you reach the equilibrium you desire.
We don't have a problem saying no to new clients. Our problem tends to be dealing with expanding needs from existing clients.
Agreed! Saying no to a new client who contacts you is not too difficult (although depending on circumstances a pile of bank notes being waved at you can influence the decision...) - but it is much harder, at least I find, to say no to existing clients for fear of damaging the relationship.
That's precisely what put us in the situation we are now. Its fine, you build great relationships and can integrate a great many things, but finding the time for other projects just disappears.